Performance Overview

• Distributed $10 million in total donations in key areas in 2010-11
• Key 2010 donations included support for children's health, cancer care, child literacy, ski hill upgrades and a new aquatic centre in Fort McMurray
• Key 2011 donations included support for science learning programs, a new Science and Technology Centre at a Fort McMurray high school, cancer care for women, and an engineering university transfer program
• Corporate campaign in 2011 recognized employee volunteers and engaged employees in voting a total of $50,000 in donations for their charities of choice

Corporate Giving Policy

In order to enrich the lives of our employees and improve the well-being of the communities where our people live and we do business, Syncrude provides funds to support community activities meeting specific criteria. Our corporate giving is designed to help us continue to earn our social license to operate and enhance our corporate reputation as well as our ability to attract and retain qualified employees.

Complete details on our policy and program guidelines are available at www.syncrude.com/community.

Focus Areas for Giving

Syncrude's giving in the Wood Buffalo region focuses on participating in community initiatives that help build our reputation and enhance employee retention. In Edmonton, our giving focuses on initiatives which serve that community and also benefit people living in northern Alberta communities, for example, health care services. Investments are made in both markets that help build training and education capacity to support long-term recruitment needs.

In 2010, the programs and projects we supported helped enhance quality of life and education in Wood Buffalo. Programs and projects supported in 2011 helped build capacity for science, engineering and technology education.

Corporate Donations

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Community Investment by Category

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Investing in Education, Training and Future Careers

• $1 million over four years to help establish a new Science and Technology Centre at Fort McMurray's Father Patrick Mercredi High School. The project is valued at $4 million and aims to help local students develop technology skills needed by local employers. Two new labs focused on engineering technologies and industrial trades will provide hands-on learning opportunities that will give students a competitive advantage when applying for post-secondary training and apprenticeships.
• $80,000 over three years to support six literacy programs at the Fort McMurray Public Library. The programs focus on improving the literacy skills of toddlers and young children.

• $500,000 to the University of Alberta to support delivery in the Wood Buffalo region of the DiscoverE and WISEST (Women in Scholarship, Engineering, Science and Technology) programs. DiscoverE introduces students to engineering, science and technology, while WISEST is a summer program that places students in research lab roles that are not typical for their gender.
• $250,000 to MacEwan University to support the Bachelor of Science in Engineering Transfer Program. This program enables the first year of a Bachelor of Science in Engineering degree to be taken at MacEwan. Upon successfully completing the first year, students are guaranteed entrance to the second year program at the University of Alberta.

Our Support for Health Programs and Initiatives

• $2 million over five years to the Northern Lights Health Foundation for programs and equipment that support women's health.
• $250,000 over five years to the Stollery Children's Hospital Foundation to expand the emergency room, which will help increase capacity and access to services, including for patients from the Wood Buffalo region needing specialized care.
• $150,000 over three years to the Alberta Cancer Foundation to establish a Fort McMurray-based nurse navigator to guide cancer patients through their treatment.
• $30,000 over three years to the Alberta Council of Women's Shelters for its new Family-Business Connect Program. The program encourages local businesses to become partners in confronting the challenges of domestic violence.
• $250,000 over five years to the Compassion House Foundation to expand its Edmonton-based facility that provides accommodation and supports to northern Alberta women who must travel to the city for breast cancer treatments.
• $110,000 to Ronald McDonald House Northern Alberta to aid in the provision of accommodation and supports to northern Alberta children and their families who must travel to Edmonton for medical treatments.

Helping to Build Local Sports and Recreation Opportunities

• $1,000,000 over four years to MacDonald Island Park for programs at the Syncrude Aquatic Centre. The centre includes a 10-lane, 50-metre pool, waterslides and a spray park.
• $500,000 over five years to Vista Ridge All Seasons Park to support its ski hill expansion project. Syncrude's support enabled the construction of a new chair lift and three new runs.

• $450,000 over three years to sponsor the Syncrude Boreal Open Canadian professional golf tour event in Fort McMurray, in 2011, 2012 and 2013. The tour event brings world-class golf to the community and also raises funds for KidSport, a local charity that provides financial support to children so they can participate in organized sports.

Enhancing Quality of Life Through Arts and Culture

• $300,000 over three years to Events Wood Buffalo to enhance the WinterPlay Festival and enable its expansion to all Wood Buffalo communities. Some of the funds will support the organization's other events, including InterPlay, Canada Day celebrations, and the Santa Parade.
  

  Mushers in the WinterPlay Three Forts Sled Dog Race endured a 176-mile journey, following an old mail delivery route from Fort McMurray to Fort Chipewyan. Credit: WinterPlay

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• $200,000 over three years to Keyano College to renew Syncrude's presenting sponsorship of Syncrude Arts Alive, a series of live theatre and music experiences at Keyano Theatre, in Fort McMurray.

Employees Respond to United Way Campaign

Syncrude employees once again responded generously to Fort McMurray's annual United Way campaigns in 2010 and 2011, helping the city retain its status as Canada's most giving United Way community on a per capita basis for six consecutive years. Syncrude's 2010 workplace campaign raised a record $1.58 million while $1.94 million was raised in 2011.

Corporate and Employee Contributions to
the United Way

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Campaign Salutes Community Volunteers and Engages Employees in Corporate Giving

A 2011 campaign to recognize and promote employee volunteerism also succeeded in its secondary goal of engaging employees in learning about the work of community not-for-profit agencies through a $50,000 choose-your-charity give-away contest. Nearly 1,600 employees participated in the on-line campaign, selecting KidsForever as the $25,000 winner, and five other agencies as recipients of $5,000 each; they are Big Brothers Big Sisters of Wood Buffalo, the Centre of Hope, the Fort McMurray Chinese-Canadian Cultural Society, Sanatan Mandir Cultural Society and the Fort McMurray SPCA.

Good Neighbours Program Benefits Local Charities

Syncrude's Good Neighbours employee volunteerism grant program enjoyed expanded participation in 2010-11. The program recognizes and incents employees to engage in community volunteerism by awarding $500 grants to the organizations for which they volunteer. A total of $205,000 was awarded in 389 individual grants during the two reporting years, as compared to $180,000 in 359 grants in 2008-09. Many of the same organizations also shared in a total of $170,000 in Good Neighbours busing grants ($2,000 each), which help offset the cost of travel to out-of-town events, such as sports tournaments. Click here for more information on this program.

Hitting the Right Notes

His son's involvement in a school band program prompted Syncrude employee Lance Ferriss to make the program more accessible to students facing financial barriers. Lance spearheaded an effort to collect, repair and donate used instruments to students in need. Thus far, more than twenty refurbished instruments have been donated to budding young musicians.

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Program Helps Develop Community Leaders

In 2011, Willis Doiron became the latest Syncrude employee to graduate from Leadership Wood Buffalo, a development program that aims to create a new generation of community builders. Doiron went on to serve as co-chair of Syncrude's 2011 United Way workplace campaign. Two other employees, Sana Elach and Lynn Joyce, currently serve on Leadership Wood Buffalo's Board of Directors.

Forester Stewards Natural Places

Moving to Fort McMurray in 2005, Syncrude forester Eric Girard and his wife, Sophie, have enjoyed the boreal forest that surrounds the community. So much so, that they formed the Wood Buffalo Adventure Club, which now boasts 100 members. The group participates in many outdoor activities and takes care of the local Birchwood Trail System. It also provides input to local and provincial plans for parks and recreation spaces.

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Performance Overview

• Recognized as one of Alberta's top employers and best workplaces
• $2 million in scholarships awarded to children of employees
• President and CEO holds town hall meetings with over 5,000 employees
• 2011 employee attrition lowest in five years

Our Commitment

Syncrude's over 5,000 employees are key to our success and are our most valued asset. We encourage their achievement of high quality results by creating an environment that fosters teamwork, mutual respect and measured risk-taking. We make every effort to acknowledge their contributions and celebrate successes through highly competitive compensation, recognition and development programs.

Labour Pool Initiatives

Syncrude has a multi-staged approach to address its workforce needs.

It begins by raising awareness of career opportunities in the oil sands by participating in such initiatives as school and campus presentations, career fairs and other special events, and trades development programs like those promoted by CAREERS: The Next Generation.

Oil Sands Extraction Process Program

This program, launched in the spring of 2010 with participating employees from Syncrude and another oil sands developer, aims to help increase the pool of talent in the region by enhancing the knowledge and skills of bitumen extraction process operators. The two developers worked with Keyano College to build the program and it continues to be adapted with a view to accommodating participants who are not currently employees of the partnering companies. The aim is to offer learning opportunities to both experienced and aspiring process operators. Since the program's inception, more developers have joined as program partners. Graduates earn an Extraction Technician Certificate.

High School Technology Centre

Supported by Syncrude, a technology centre that opened in September 2011 at Fort McMurray's Father Patrick Mercredi High School is enabling students to access equipment and learning opportunities not usually offered at the high school level. The centre gives the students insight into various engineering specialties and works to influence their future career path decisions. In particular, students can receive credits toward a high school diploma while, at the same time, have the opportunity to meet requirements for a 4th Class Power Engineering certificate.

Apprenticeships

Apprenticeships in recognized trades and technologies can be accessed through Syncrude directly or via two widely available programs in which Syncrude participates. The Community Cooperative Apprenticeship Program is an industry-driven education partnership providing training through annual rotating work placements. The Registered Apprenticeship Program is offered to high-school students in the form of work experience courses, Career and Technology Studies courses, and part-time employment.

Introduced in 2009, the Syncrude Aboriginal Trades Preparation Program prepares participants to pursue trades apprenticeship training through academic upgrading and work experience placements at our operation. Upon successful completion, students are eligible to become indentured apprentices at Syncrude. The program is available at Keyano College in Fort McMurray, as well as learning centres in Janvier, Fort Chipewyan and Fort McKay. It is sponsored by Syncrude, Alberta Employment & Immigration (AEI), Alberta Human Services (AHS), Rupertsland Institute, Chipewyan Prairie First Nation, Fort McMurray #468 First Nation, Fort McKay First Nation and the Mikisew Cree First Nation. It has also received additional support from the Athabasca Tribal Council, the Métis Locals, and Alberta Apprenticeship & Industry Training.

Co-Op/Discipline Students

Every year, Syncrude provides work terms of varying lengths for about 200 co-op/discipline students, who come to Syncrude from post-secondary schools across Canada. About 60 students are on-site at any given time. During their time with Syncrude, the students gain valuable work experience in their field of study, and work alongside knowledgeable experts. In addition to competitive wages, the students also receive paid transportation to and from Fort McMurray; along with paid accommodation, internet and cable.

Syncrude Higher Education Awards Program

Children of Syncrude employees can qualify for up to $2,400 for each year of their post-secondary degree or diploma education. About $2 million in program scholarships was granted to 871 applicants (returning and new) in 2008-09, with another $2 million to 924 applicants in 2010-11.

New Employees – Diversity

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Syncrude invests in programs aimed at increasing the number of Aboriginal and female employees in our workplace. This includes the Aboriginal Trades Preparation Program at Keyano College and the Women in Scholarship, Engineering, Science and Technology program through the University of Alberta.

Workplace Development and Retention Initiatives

Syncrude offers a variety of education and training opportunities, and incentive programs, to our employees. These encourage people to commit to a career with the organization, and develop the specific skills that we need to run our operation.

Initial Professional Development Program

IPDP is a core Syncrude workforce strategy and opportunity for new employees to grow. It provides a better career development experience for the approximately 120 new graduates who join Syncrude each year. IPDP comprises networking opportunities with management and leaders, as well as mentoring, orientation and development assignments.

Education Tuition Refund Program

This program supports professional development for regular employees who desire learning opportunities in fields of study that are relevant to Syncrude's business. It provides a 100 percent refund on tuition, textbooks and materials, and mandatory fees for approved post-secondary courses.

Leadership Development Program

A new Leadership Excellence Training program was launched at Syncrude in 2009. This program is delivered in seven days over five months and aims to provide leaders with the skills needed to lead their departments effectively, model best practices and attitudes, inspire and communicate shared goals, challenge and improve processes, enable team members by delegating effectively, and offer timely encouragement and recognition. The program uses both real and hypothetical situations as learning tools.

Housing Support Program for Fort McMurray Employees

Syncrude launched a housing support program in June 2009 to help improve its ability to attract and retain employees in Fort McMurray, where the labour market is competitive and accommodation costs are high when compared to other regions in Alberta. The five-year program provides up to $60,000 to eligible employees to offset the cost of mortgage interest. Eligible employees who rent accommodation may receive up to $30,000 in rental cost offsets. To earn the maximum benefit employees make the commitment to stay with Syncrude for 10 years.

Impact 21 Incentive Program

Syncrude's Impact 21 program motivates all employees to reach business goals by paying financial rewards to them when corporate targets in safety, reliability, production, costs, energy efficiency and environmental performance are achieved or surpassed.

Retention Program for Fort McMurray Employees

To help secure and retain the skilled workforce required to sustain its operation, and to reward existing and future employees for their commitment and contributions to Syncrude, Syncrude has a retention program for Fort McMurray-based employees. It gives eligible employees three annual payments of 20 percent of their day-base salary up to a maximum of $20,000 before statutory deductions, per program year. All Fort McMurray-based employees also receive a salary uplift of 14 percent over employees working in other locations.

CEO Engages with Employees

Syncrude President and CEO Scott Sullivan, who joined the company in July 2010, engaged with the company's entire employee population over the course of 23 meetings held in early 2011. The sessions were designed to foster feedback from employees as much as share information about corporate direction, goals and challenges. Employees raised a range of issues, including commuting, compensation and benefits, career development, plant reliability, environmental performance and future growth plans. In response, three committees were formed to assess and propose solutions to the issues most commonly raised: commuting & transportation; career and succession planning; and leadership communication. A second series of sessions occurred in early 2012 to provide an update on the work of these committees and to encourage continued dialogue.

Workforce by the Numbers

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Human Resources Score Card

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Scholarships, Bursaries and Endowments

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Employee Awards & Appointments

Syncrude employees serve the community in many different ways and in many areas of need. Listed here are a selection of those who serve or have been recognized by their professions.

Kim Farwell was elected President of the Association of Professional Engineers, Geologists and Geophysicists for a one-year term in June 2010. A Syncrude Chemical Engineer and Organizational Effectiveness Advisor, Farwell has been a longtime volunteer with the organization and was awarded an honourary life membership in April 2011.

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Mark Johnstone was honoured by the Alberta Apprenticeship and Industry Training Board as Alberta's Top Apprentice for 2010 in the Power Systems Electrician Trade. Johnstone has been a Syncrude employee since 2006.

Corporate Awards

Syncrude is proud to have received several corporate awards in 2010-11. These reinforce our efforts to be a favoured employer and a responsible oil sands producer.

Canada's Top Employers of Young People 2011 – adjudicators cited our apprenticeship, training & development programs, summer work placements for high school students, mentoring program and excellent starting benefits.

Canada's Top Employers of New Canadians 2010 & 2011 – adjudicators cited Syncrude for recognizing the foreign education and experience of qualified immigrants, its support of local English as a second language courses, and the assistance given to employees in obtaining Canadian professional accreditation.

Alberta's Top Employers 2010 & 2011 – Syncrude was cited for hiring incentives, flexible health benefits, savings plans, maternity leave coverage, helping employees balance work and personal life, and encouragement of employee development through training, mentoring and scholarships.

Alberta Venture Magazine Best Workplaces Awards 2011 – Syncrude earned honourable mentions in the categories of Best Workplace for Working Parents and Best Workplace for Diversity. For the former, judges cited company policies for parental leave and other programs; for the latter, judges cited programs to recruit and integrate immigrants, Aboriginal people and people with special needs.

Alberta Business Award of Distinction for Aboriginal Relations 2010 – Syncrude's commitment to working with First Nations and Métis communities in the Wood Buffalo region earned recognition from the Alberta Chambers of Commerce. Adjudicators cited Syncrude for establishing and meeting commitments in six priority areas, including employment.

Syncrude Department Introduces
Pay it Forward Award

Recognizing the value of peer-to-peer recognition, leaders in Syncrude's Mine Mobile Maintenance department introduced a Pay it Forward Award to recognize employees for going beyond their duties and providing outstanding leadership. Award winners get to choose the next recipient. One winner, Keith Maclean, says, "It's an honour to be recognized by my peers for the work I am doing in my area and through the team's efforts."

Performance Overview

• Continued $2 million commitment to Aboriginal Trades Preparation Program at Keyano College
• $1 million donation to Father Mercredi High School Technology Centre develops future workforce
• Continued joint industry and union collaborations to address future labour shortages

Our Commitment

When Syncrude has a need for skilled labour, our commitment is to employ Albertans and Canadians first. If unions are unable to source Canadian workers, they will then seek tradespeople in the United States, and then, if needed, other countries. Syncrude makes every effort to treat these workers with respect and to instill our three key values of safety, productivity and schedule among all those who contribute to our project-related work.

Addressing the Availability of Skilled Labour

In addition to our regular workforce, Syncrude relies on a large contingent of skilled tradespeople who contribute to many functions at our site, including major maintenance turnarounds and construction of new projects. These workers are primarily sourced through the Building Trades of Alberta, which represents 16 trade unions and 60,000 union members, and has the ability to draw from union halls across Canada. In the event that workers cannot be found in Canada, the Building Trades then sources from the United States and Ireland where skills and certifications are comparable to those in Canada. For example, on our major 2011 turnaround, less than one percent were brought in from outside of Canada.

Our demand for skilled tradespeople is taking place in a highly competitive environment for labour resources. Overall, labour needs at Syncrude and elsewhere in Alberta and Canada are expected to grow significantly between 2012 and 2020. At the same time, many workers will retire during this period. Without active labour market intervention, demand will likely exceed market supply capacity. By actively working with our partners, we are pursuing a number of initiatives to further develop more skilled workers in Canada. As well, we continue to focus on making strategic investments that encourage youth to choose trades as a career, such as the Father Patrick Mercredi High School Science and Technology Centre, CAREERS: The Next Generation, and program development at Keyano College.

Management Approach

The Syncrude Labour Relations Executive Steering Committee, composed of senior Syncrude leaders, assesses our labour workforce needs and develops short- and long-term strategies to meet those needs. This committee also oversees Syncrude's engagement with several external stakeholder organizations that are working to influence labour market outcomes. They include:

Construction Owners Association of Alberta

The COAA provides leadership to enable the Alberta heavy industrial construction and industrial maintenance industries to be successful in safe, effective, timely and productive project execution. A Syncrude leader serves on its Board of Directors. In 2011, the Association issued a position paper on Heavy Industrial Construction and Maintenance Workforce Challenges in Alberta. It forecast a national scarcity of skilled trades that will be most acutely felt in Alberta's heavy industrial construction and maintenance industries. The paper sketched a vision for the Alberta workforce of the future and provided recommendations for a combination of near-term and medium-term actions. View the paper.

National Owners Forum

This group of major construction project owners from across Canada, including Syncrude, convened in 2010 to develop a five-year strategy for 2011-16 to cooperatively address the workforce challenges facing the construction industry. The strategy set out a 26-point implementation plan for owners, industry, educators and trainers, governments and other stakeholders to address the issues identified by the group. View the strategy.

Alberta Owners/Building Trades Canadian Executive Board Partnership

This group is comprised of construction project owners and labour representatives (unions). It is co-chaired by a Syncrude leader on behalf of the project owners and by the president of the Canadian Executive Board on behalf of the union affiliates. The group's vision is for Alberta to have a safe, effective, productive and high value-added construction and maintenance industry. Toward this, it engages in dialogue, information sharing and the exploration of ways to effect continuous improvement. It develops and implements strategies for priority areas and collaborates with others on complementary initiatives.

Alberta Council of Turnaround Industry Maintenance Stakeholders

ACTIMS is comprised of owners, labour providers and contractors. It works to ensure an adequate and properly trained workforce for major industrial maintenance turnarounds in Alberta. The group is working to identify needed worker volumes, skill sets and qualifications; improve communication with labour providers regarding project plans and labour needs; develop standardized worker training and worksite protocols; and recruit new apprentices.

Construction Industry Stakeholders Association of Alberta

This group is comprised of construction project owners, labour providers and contractors, and is chaired by a Syncrude leader. It works to ensure an adequate and properly trained workforce for major industrial construction work in Alberta by identifying the quantities, skill sets and qualifications of needed workers; and by improving communication with labour providers with regard to project plans and labour needs. It also develops standardized worker training and worksite protocols, and recruits new apprentices.

Finding Common Ground

The construction industry stakeholders discussed earlier agree on the common themes that need to be addressed to provide a sustainable construction workforce that is able to meet short-, medium- and long-term industry needs. Working committees from the various groups focus on these issues and, where there is opportunity, federal and provincial agencies are also engaged in sustainment work. Themes include:

• continually monitor supply and demand situation;
• refine demand forecasting and work specifications for skilled trades;
• implement initiatives to improve workforce productivity;
• enhance interprovincial labour mobility;
• train more apprentices & increase training capacity;
• enhance outreach about skilled trades careers to junior high & high schools;
• enhance recruitment from non-traditional sources: women and Aboriginals;
• improve access to temporary foreign workers;
• increase immigration of skilled workers;
• spread workloads through modularization to off-site (i.e.: less remote) fabricators in different jurisdictions; and
• coordinate turnaround activities to minimize labour demand conflicts.

Treatment of International Workers

Skilled tradespeople sourced from outside of Canada and who work at Syncrude are protected by all Canadian labour regulations, as well as the respective collective agreements Syncrude contract companies have with various unions. They are treated and compensated the same as any domestic worker, and the federal government provides assurance of this through unannounced visits to the workplace. Sponsoring unions also conduct their own independent audits and assessments.

Performance Overview

• Liaising with Alberta Government regarding our proposed tailings management technology platform
• Continued participation in the Oil Sands Developers Group; active on committees related to transportation, health care, municipal affairs and Aboriginal relations
• Contributed to dialogue with the local Municipality for the development of express bus lanes entering Highway 63 from two Fort McMurray subdivisions

Our Communications and Stakeholder Relations Policy

Attaining objectives in social, economic and environmental performance from current operations and potential growth opportunities can only be achieved by earning and maintaining the consent and support of our stakeholders.

Syncrude will actively seek to establish long-term relationships with our stakeholders through consultation, collaboration and the provision of information, and will manage these processes with honesty and integrity.

Direct Stakeholder Engagement

Syncrude directly engaged with the following groups during the reporting period:

Alberta Conservation Association

This group received funds from Syncrude after Syncrude was directed to pay a creative sentence for environmental offences arising from the 2008 waterfowl incident on our site. The funds were used to purchase Alberta habitat for migrating waterfowl.

Government of Alberta

In response to the government's Directive 074 on tailings management, Syncrude is liaising with officials at Alberta Environment about our proposed tailings management technology platform and on a broader tailings management framework for the mineable oil sands industry.

Government of Alberta

Syncrude is in preliminary discussions with provincial regulators about our proposal to expand an area known as the W4 Dump, and to use it for long-term storage of centrifuged tailings reclamation material.

Regional Municipality of Wood Buffalo

Syncrude, along with two other oil sands operators, engaged with the Municipality to advance a proposal for the development of express bus lanes entering Highway 63 from two Fort McMurray subdivisions. The proposal was successful and one bus lane is now operating; the other remains under discussion.

Syncrude is also involved on the Municipality's Stakeholder Advisory Committee. This group meets several times per year to ensure exchange of information on key regional topics such as transportation, infrastructure planning, the Municipal Development Plan and sustainability initiatives. It is managed by the Municipality and includes participants from the Chamber of Commerce and the Oil Sands Developers Group.

Local School Boards and Keyano College

Syncrude had discussions with representatives from the local education community to learn about program and infrastructure need and opportunity areas. The dialogue helped identify projects Syncrude is supporting through our Community Investment program. (see Community Involvement chapter)

The Oil Sands Developers Group

Syncrude engaged with various stakeholders during the reporting period through our participation in the Oil Sands Developers Group (OSDG), which is a non-profit, industry-funded association that works to foster responsible oil sands development. Syncrude provides leadership to OSDG at the Board and Committee level to identity, advocate and champion solutions on various issues related to the regional impacts of oil sands development. Kara Flynn, Syncrude Vice President of Government and Public Affairs, serves as Vice-Chair of the OSDG Board. Syncrude employees also chair, or are active, on the following committees:

• Transportation works to identify issues and needs related to impacts of resource development on transportation within the Regional Municipality of Wood Buffalo, and recommend and implement strategies to address these. Syncrude is one of two OSDG representatives on the Government of Alberta's recently established Transportation Coordinating Committee, which is working under Ministerial appointment to identify long-term transportation needs in the Athabasca Oil Sands region.

• Health Care aims to promote mutual understanding of health care delivery issues and oil sands development impacts and to explore possible synergies between OSDG members and Alberta Health Services. The committee is currently seeking clarity from the Alberta government on the issue of health impacts caused by blowing tailings sands, and how this issue will be dealt with through the Alberta Occupational Health and Safety Act.
• Municipal Affairs works to develop sustainable policy frameworks in Wood Buffalo by engaging and partnering with a variety of stakeholders, including the Regional Municipality of Wood Buffalo, the Government of Alberta, the Fort McMurray Chamber of Commerce, the Canadian Association of Petroleum Producers, and the Canadian Property Tax Association.
• Aboriginal Affairs identifies issues related to the impacts of resource development on Aboriginal Peoples living within the Regional Municipality of Wood Buffalo, and recommends strategies to address Aboriginal issues.

• Co-generation/Transmission looks at accessing and addressing the electricity transmission needs of the oil sands producers in region and its linkages throughout the province. The committee provides a forecast report each year on co-generation and power infrastructure.
• Communications strives to create understanding and support for the OSDG among key stakeholders and to ensure that the OSDG is a credible, accurate, current and accessible source of information on oil sands development.
• Regional Environmental & Regulatory Affairs provides an industry member forum to discuss issues related to potential environmental impacts of oil sands development within the Regional Municipality of Wood Buffalo. It develops common industry positions on environmental and regulatory issues that arise over time.

The Canadian Association of Petroleum Producers

The Canadian Association of Petroleum Producers (CAPP) is the voice of Canada's upstream oil, oil sands and natural gas industry. It works to enhance the economic sustainability of the Canadian upstream petroleum industry in a safe and environmentally and socially responsible manner, through constructive engagement and communication with governments, the public and stakeholders in the communities in which we operate.

Syncrude is a member of its Executive Policy Group on Communications, which oversees the communications and reputation management strategy CAPP is executing on behalf of the oil sands industry.

CAPP also led the work toward the 2011 creation of the Canadian Oil Sands Innovation Alliance (COSIA), whose mandate to accelerate the pace of improvement in environmental performance in Canada's oil sands through collaborative action and innovation is supported by Syncrude. The alliance is focusing on the four environmental priority areas of tailings, water, land and greenhouse gases.

CAPP also leads industry efforts with respect to influencing climate change policy at the provincial and federal levels.

The Mining Association of Canada

The Mining Association of Canada (MAC) works to ensure the continued strength and sustainability of Canada's mining industry by representing a broad array of organizations spanning many sectors, either directly or indirectly associated with mining and mineral processing. Gord Ball, Syncrude Vice President of Strategic Projects, serves on its Board of Directors and Governance Team. Jim Carter, former Syncrude President and Chief Operating Officer, is an Honorary Life Director.

MAC executes much of its work through committees comprising functional experts from across the mining industry. They provide oversight and governance that guide mining-related policy and support continued innovation and alignment around programs such as the Towards Sustainable Mining (TSM) responsible development initiative. Kara Flynn, Syncrude Vice President of Government and Public Affairs, chairs the Public Affairs Committee and represents the organization on the TSM Initiative Leaders Committee. Syncrude employees are also active on the Environment and Science committees.

In the reporting period, MAC engaged with the Government of Canada on proposed changes to the Fisheries Act and the Canadian Environmental Assessment Act.

Performance Overview

• The first ever Good Neighbour Agreement between Syncrude and Métis Local 1935 was signed in December 2010
• A bilateral agreement with Fort McMurray 468 First Nation was signed in April 2011
• Regular consultation meetings were held with all five of the region's First Nations and several Métis locals, with a total of 236 consultation and community engagement activities in 2010-11
• A long-term Syncrude employee was seconded to the Chipewyan Prairie Dene First Nation in October 2011 to advise on the community's business development efforts
• Regular contact with Aboriginal contractors (at least two meetings per year per contractor) was maintained and issues and concerns were documented and tracked to enable prompt resolution
• A joint venture among the Athabasca Chipewyan First Nation, the Fort McKay First Nation and a third party won a Syncrude contract to provide all site food services, commencing January 2011
• Chief-to-Chief meetings were held between Syncrude and the Fort McKay First Nation, the Athabasca Chipewyan First Nation, Mikisew Cree First Nation, Fort McMurray 468 First Nation, and Chipewyan Prairie Dene First Nation. As well, a Chief-to-Chief meeting with all Chiefs was held during the 2011 Treaty 8 celebrations
• Elders advisory tours on Syncrude reclamation projects were held in 2010 and 2011 for Elders from the Fort McKay First Nation, Athabasca Chipewyan First Nation, Mikisew Cree First Nation, Fort McMurray 468 First Nation, Chipewyan Prairie Dene First Nation and Métis Locals 1935, 125 and 63

Aboriginal Relations Policy, Program & Governance

Syncrude's policies pertaining to our relationships with Aboriginal stakeholders are incorporated into our overarching Communications and Stakeholder Relations Policy and Stakeholder Consultation Guidelines.

The goals of our Aboriginal Relations Program are to:

• be a corporate leader in Aboriginal Relations and employment and a sustainable and socially responsible leader and employer in the oil sands industry;
• attract and retain qualified employees from local Aboriginal communities to assist in meeting our workforce needs;
• be an employer of choice for Aboriginal people;
• be a corporate leader in Aboriginal business development;
• achieve effective, two-way relationships and consultation with local Aboriginal stakeholders;
• focus community investment initiatives on education and recruitment, community relations, cultural retention, and Aboriginal leadership;
• ensure local Aboriginal communities have the capacity to engage with Syncrude regarding consultation, employment, business, and environmental and socio-economic impacts from our projects; and
• ensure Syncrude's environmental programs are designed to mitigate impacts to traditional land uses, incorporate traditional knowledge where possible and are well understood by our stakeholders.

Our engagement with those affected by our operations is ongoing, and in specific cases is also triggered by regulatory applications that fall under the following laws and under which Syncrude has a delegated duty to consult:

• Oil Sands Conservation Act;
• Alberta Environmental Protection and Enhancement Act, including Closure and Reclamation Plan renewals;
• Alberta Water Act;
• Federal government approvals or amendments (e.g.: Fisheries Act or Canadian Environmental Assessment Act); and
• Licenses or permits that fall outside of existing Mineral Surface Leases (e.g.: winter drilling programs).

In the reporting period, Syncrude had two active regulatory applications requiring project-specific consultation: Southwest Sand Storage (SWSS) project was approved without the need for a public hearing and consultation on the Base Mine Lake diversion project is continuing.

Our Aboriginal Workforce

Syncrude was successful in attracting 86 new Aboriginal employees in 2010-11. Attrition among Aboriginal employees was generally consistent with overall workforce attrition, at 10.2 percent in 2010 and 7.4 percent in 2011. As at year-end 2011, our 493 Aboriginal employees comprised 8.6 percent of our total workforce, an increase of 0.2 percent over 2009.

Ongoing recruitment initiatives, such as the day-to-day work of Syncrude's Aboriginal Recruitment Specialist, Syncrude's rotational employment program in several Wood Buffalo Aboriginal communities, and Syncrude's participation in the Aboriginal Human Resource Council's Inclusion Works National Career Fair will help maintain strong levels of Aboriginal hiring. Workforce development initiatives, such as our work to support education and trades training programs, also play an important role in developing the next generation of Aboriginal employees.

Aboriginal Workforce

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In 2011, Aboriginal people represented over 15 percent of our new employees.

Aboriginal Cultural Awareness Training

To create an enhanced working environment for Aboriginal employees and improve Aboriginal employee retention, Syncrude committed in 2011 to cultural awareness training for key leaders and staff in our organization. The training will help ensure that Syncrude leaders demonstrate respect for and understand the cultural traditions of local Aboriginal people. The half-day program commenced late in 2011 and will provide greater understanding of Aboriginal history, culture and lifestyles, and insight into how these factors translate into the workplace. It is being conducted by a company whose owner is a member of the Mikisew Cree First Nation.

Business Development Reaches $1.7 Billion

Syncrude recorded strong performance for Aboriginal procurement in 2010-11, with a total business volume of $291 million with companies owned by Aboriginal entrepreneurs and First Nations in the Wood Buffalo region, an increase of $41 million over 2008-09. This brought to $1.7 billion the total cumulative procurement since 1992, when Syncrude established a minimum annual target of $30 million. Our policy requires an Aboriginal business to be 51 percent owned by a band or Inuit, First Nations or Métis person. The Aboriginal owner must also be in control of the operations on a day-to-day basis.

Procurement with Aboriginal-Owned Companies

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The cumulative total for Syncrude business with First Nations- and Métis-owned companies since 1992 is over $1.7 billion.

Investing in Strong, Healthy Communities

Syncrude invested nearly $2 million in Aboriginal community projects during 2010-11. Among the projects we supported:

• The WinterPlay Festival. Funds from Syncrude enabled the expansion of this annual event to Wood Buffalo Aboriginal communities in 2010.

• The Syncrude Aboriginal Trades Preparation Program at Keyano College. It comprises scholastic upgrading, trades exploration and work placements at Syncrude. The Program is offered at the College's main Fort McMurray campus and also in the region's Aboriginal communities of Fort Chipewyan, Fort McKay, Janvier and Conklin. Syncrude offers permanent jobs to all students upon successful completion of the program, including 16 graduates in 2010 and 20 in 2011.
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  Jeffrey Cree is a heavy equipment apprentice with Syncrude and a graduate of the Aboriginal Trades Preparation Program.

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• The National Aboriginal Achievement Awards (now the Indspire Awards) and the NAAF Education Series Career Fair for Aboriginal high school students.
• The Science Alberta Foundation. It will produce classroom science learning tools for Aboriginal schools in the Wood Buffalo region and beyond.
• The Anzac Li'l Lakers Family Resource Centre. In the community of Anzac, it provides children's programming, after-school programs, parental education, personal development, and arts & culture workshops.

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  Program facilitator Michelle Whitford assists Ryan Belore on his latest Li'l Laker masterpiece.

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• Alberta Foundation for the Arts Travelling Exhibition (TREX) Program. It features works by Aboriginal artists in an exhibition that travels to various communities across Alberta.
• A bison education kit for all 23 schools in the rural Northland School Division. The kit was originally commissioned by Syncrude for use in the Fort McKay School and proved so popular that Syncrude provided funds to enable its use in more schools.
• The WISEST and DiscoverE programs with the University of Alberta School of Engineering, which will now reach out to Aboriginal communities in northern Alberta.

Syncrude Leaders Serve on National Boards

Two Syncrude leaders continued to serve on the governing boards of national Aboriginal organizations during the 2010-11 reporting period. Dan Brown, Manager of Process Control and Automation, volunteers for the Aboriginal Human Resource Council, and Kara Flynn, Vice President of Government and Public Affairs, volunteers for the Canadian Council for Aboriginal Business.

Syncrude Helps Refine PAR Program

Syncrude leaders are helping the Canadian Council of Aboriginal Business refine and enhance the Council's Progressive Aboriginal Relations Program. The program was developed as a framework for companies to measure progress on developing progressive Aboriginal relations and considers corporate efforts in Aboriginal employment, Aboriginal business development, building individual capacity and enhancing relations with Aboriginal communities. Syncrude currently holds Gold Level PAR distinction, and has been accredited five times.

Aboriginal Relations Program Recognized

Syncrude's commitment to working with First Nations and Métis communities in the Wood Buffalo region earned an Alberta Business Award of Distinction for Aboriginal Relations Best Practices, bestowed by the Alberta Chambers of Commerce in February 2010. Adjudicators cited Syncrude for establishing, and meeting, commitments in six priority areas.

Employment Program Marks 30^th Year

A Syncrude rotational employment program for people from the Aboriginal community of Fort Chipewyan celebrated its first 30 years in November 2010. The program enables participants to be employed by Syncrude while remaining active residents of their community. Fly-in/fly-out transportation and Fort McMurray-based accommodation is provided by Syncrude. Since 2009, the program has also been offered to residents of the southern Aboriginal communities of Janvier and Conklin. About 26 residents of the three communities were active employees as at year-end 2011.

Beaver Creek Wood Bison Ranch

In 1993, Syncrude introduced a herd of wood bison into a reclaimed area to assess the capability of the landscape to support large mammals such as ungulates. Today, approximately 300 wood bison graze on 300 hectares of land at the Beaver Creek Wood Bison Ranch. The herd is managed cooperatively with the Fort McKay First Nation.

The health of the animals is monitored through annual veterinarian examinations. Due to the herd's excellent health and disease-free status, it has become part of a genetic preservation project headed by scientists from the Universities of Calgary and Saskatchewan, the Canadian Food Inspection Agency, Parks Canada, the Government of the Northwest Territories and the Calgary Zoo.

The herd has been recognized with several livestock awards at regional and national competitions. In 2010, the ranch received the highest bid for a female animal at the national show, followed with the title for Grand Champion Female in 2011.

In 2010, bison twins were born on the ranch. Not only is this rare in the bison species, but it was made even more extraordinary by the twins being male and female. Their birth gave researchers an opportunity to study whether freemartinism – a naturally-occurring genetic gender abnormality seen in cattle which causes infertility in female calves born with male twins – would also occur. After veterinary testing, it was confirmed the female was sterile. Research from this event is being collected and published to further the understanding and management of bison herds.

First Nations' Community Health Studies

Please see discussion about community health studies in Fort McKay and Fort Chipewyan in Safety and Health.

Aboriginal Caucus in Place on Multi-Stakeholder Association

Recommendations from a year-long review over the governance and operation of the Cumulative Effects Management Association (CEMA) led to the establishment of an Aboriginal Caucus and the hiring of an Aboriginal Coordinator in February 2011. The Coordinator is to facilitate meaningful involvement by Aboriginal stakeholders in the affairs of the multi-stakeholder organization, whose role is to advise provincial and federal governments and make recommendations with respect to managing the cumulative environmental effects of regional development on air, land, water and biodiversity. Toward this, CEMA recommends management frameworks, best practices and implementation strategies that address cumulative effects on air, land, water and biodiversity to protect, sustain and restore the environment and to be protective of human health.

Syncrude Aboriginal Review

Published annually, Syncrude's Aboriginal Review provides a comprehensive overview of our Aboriginal Relations work and our progress in stewarding to our key commitment areas of corporate leadership, employment, business development, education, community development and the environment. View the 2011 report here.

Syncrude Scholarship Recipient Called to the Bar

Corie Flett, daughter of Syncrude employee Dwight Flett and recipient of two Syncrude-supported scholarships, was called to the Bar in 2012 and began her career as a lawyer practicing in Fort McMurray. Among her duties, Corie will provide pro bono legal services to Aboriginal clients in the Wood Buffalo region.

Performance Overview

• 2011 safety performance on-target
• Maintenance turnaround executed with best ever safety performance
• Addressed exhaust fume exposure hazard in heavy equipment after it was identified as a health risk to operators
• Alberta government investigation ongoing after contract worker dies as a result of a workplace incident

Safety & Health Management System

Syncrude is in the process of adopting the ExxonMobil Operations Integrity Management System (OIMS) as our primary tool for managing personnel and process safety, and workforce health. The new system is expected to be fully implemented by 2013. It focuses on identifying and managing hazards through more clearly defined work processes and workforce responsibilities.

In 2011, an internal team assessed the status and effectiveness of all 11 OIMS elements; the group determined how well hazards are systematically identified, evaluated and controlled; how the risks of these hazards are managed; and that Syncrude is compliant with safety, security, health and environmental regulations. (See Management Systems for more detailed discussion on OIMS)

We are committed to achieving year-over-year improvement in safety performance towards an injury-free workplace.

Alberta Lost-Time Claim Rate Comparison

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Data source: Workers Compensation Board

New Incident, Injury & Hazard Loss Reporting Structure

Syncrude changed its illness and injury classification and reporting system effective January 1, 2011. Occupational illnesses are now included in the calculation of Total Recordable Injury Rate (TRIR) and Lost-Time Injury Rate (LTIR). The new system provides for clearer classification parameters and enables Syncrude management to improve safety performance by focusing on the types of injuries and illnesses sustained by workers. It also enables more accurate benchmarking against other petroleum producers and other Imperial Oil/ExxonMobil worksites.

Syncrude Joins Highway Safety Coalition

In an effort to promote responsible driver behaviours on busy Wood Buffalo region highways, Syncrude joined the Coalition for a Safer 63 and 881 in 2010. The Coalition aims to engage drivers, help them identify potentially dangerous driving habits and foster long-term behavioural change. The coalition includes oil sands companies, local businesses and government. In 2011, it launched a major multi-media awareness campaign and held an educational Summer Safety Jam that attracted more than 1,500 Wood Buffalo residents. Highways 63 and 881, which carry high volumes of commuter traffic, have seen hundreds of vehicle-related injuries and dozens of fatalities in recent years. The current multi-year project to twin Highway 63 should also help improve traffic safety.

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Billboard from Tunnel Vision campaign

Investigation Concluded Into 2009 Workplace Death

Separate investigations by the Alberta government and Syncrude have concluded that three factors led to the November 2009 collision between two hauler trucks at Syncrude's North Mine that claimed the life of employee Lyanne Jackson.

The investigations showed that the primary retarder braking system failed on one hauler and the operator of that truck did not apply the emergency/service brake which was available for use at the time.

Subsequently, Syncrude has enhanced truck retarder control system design and maintenance procedures beyond the original equipment manufacturer's specifications. We have also enhanced operator training about safe vehicle operation and emergency procedures.

Syncrude Fined and Creatively Sentenced for 2008 Workplace Death

In February 2011, Syncrude pleaded guilty to one charge under the Alberta Occupational Health and Safety Act, which was laid after the December 2008 incident that caused the death of employee Thomas Miller. Miller was clearing ice from a pipe rack and was fatally injured when he was struck by a large mass of falling ice. Syncrude paid a $10,000 fine and a $1,500 victim impact levy and also paid $365,000 to Keyano College as part of a creative sentence. Keyano is to develop and implement curriculum enhancements on winter hazards for its Process Operator, Power Engineering and Occupational Health and Safety programs, and also establish a $100,000 endowment for scholarships in memory of Thomas Miller.

2010 Incident Reinforces Commitment to Safety

In December, emergency crews responded to reports of a contract worker found unresponsive at our emissions reduction project construction site. He was pronounced dead at the scene. All appropriate authorities were notified and a government investigation is ongoing. We are committed to providing a safe workplace and steadfast in preventing a similar incident from occurring in the future.

Reducing Worker Exposure to Exhaust Fumes

Worker exposure to diesel exhaust fumes from mobile mine equipment at the Aurora Mine site was identified as a significant health risk in 2010 as a result of a routine hazardous operations risk assessment. Exposure risks to mobile equipment operators at Mildred Lake also were subsequently identified as a result of Syncrude's adoption of an enhanced Incident, Injury and Hazard Loss reporting structure (IIHL), in 2011. Many actual exposure incidents were recorded.

In response, a Mobile Equipment Exhaust Exposure Reduction Committee, led by our Process Safety Department, was promptly established. The group investigated the ways in which drivers are exposed to such fumes and also researched potential solutions; some were implemented immediately and longer-term work continues with equipment manufacturers on engineering solutions. As well, protocols to detect exhaust leaks were established, as were procedures for operators to follow if they detect leaks while operating equipment. Equipment with higher potential for exhaust leaks was given priority for maintenance and repairs. Also, operators are now trained to be alert to the symptoms of exposure and to take measures to avoid fume build-up. Since the changes were made, exposure incidents have dropped to virtually nil.

Emergency Response Preparation

Syncrude's emergency response personnel deal with many different kinds of situations. They prepare for these in various ways, including by participating in regional and national events that provide training in a competitive atmosphere. Their typically strong performance at these events demonstrates their proficiency to handle real-life situations. In 2011, for example, Syncrude teams participated in the National Scott FireFit Championships and the Western Regional Mine Rescue Competition.

Community Health Studies

The First Nations community of Fort McKay, which is adjacent to Syncrude's Mildred Lake site, agreed in late 2011 to work with the Alberta government to identify the main health concerns of residents and the studies needed to assess the validity of those concerns. Community members have long had questions regarding the health effects of oil sands operations and the agreement should help provide definitive answers. The process will be community-led, with the government working in a supportive role. Negotiations with the community of Fort Chipewyan for a similar agreement on health studies are continuing; that community has expressed concern about the need to include workplans, budgets and timelines into any such agreement.

Recognition for Safety Performance

Each year, Syncrude presents awards to encourage continuous improvement in safety performance throughout the organization and among contractor companies. These awards also enable the sharing of best practices and lessons learned. Two Syncrude suppliers, Terracon Geotechnique and Willbros Canada, were recognized for having exemplary safety performance in 2010, and two more, Aluma Systems and Fort McKay Group of Companies, were recognized for having the most improved safety performance. For 2011, Clean Harbors and Aluma Systems received the awards for best safety performance, while Clearwater Welding & Fabrication and Finning were recognized for most improved performance.

In addition, two Syncrude departments received awards for excellent safety performance – Utilities and Offsites in 2010 and Hydroprocessing in 2011.

Community Safety Events Help Seniors and Youth

In support of Wood Buffalo Emergency Preparedness Week in 2010, Syncrude provided funds that enabled about 200 regional seniors to receive kits that provide necessities for 72 hours of survival in case of an emergency. Seniors are an especially vulnerable group when disasters happen and the kits will enable improved emergency outcomes for this demographic. At the 2010 Fort McMurray Family Safety Day, helmets that fit and function properly were distributed to about 95 local area children. The event, which received financial support from Syncrude, attracted more than 1,100 people for a day of information sharing and activities that focused on injury prevention, emergency preparedness and wellness.

Emergency Personnel Respond to McClelland Lake Fire

In May and June of 2011, the second largest forest fire in Alberta history came in close proximity to Syncrude's Aurora North Mine. The situation persisted for weeks, creating reduced visibility and air quality, among other hazards. Keeping people safe was our top priority during this time so Syncrude reduced its site workforce to essential personnel and occasionally called for complete work stoppages.

For five weeks, Syncrude emergency response personnel and heavy equipment operators assisted crews from Alberta Sustainable Resource Development in building fire breaks and directing the fire away from work sites and populated areas.

Air quality monitoring continued at both the Aurora and Mildred Lake sites to ensure it was safe to work both inside and outside. Work exceptions were granted to staff with respiratory issues, such as asthma.

During the work stoppages caused by the fire, some equipment operators used the opportunity to upgrade their skills using simulator training.

Safety and Health

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