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TOTAL RECORDABLE CASE

FREQUENCY RATE recordable injuries per million hours worked

15

12

9

6

3

SYSTEMS AND POLICIES GUIDE CONDUCT

To promote high standards of corporate governance and ethical business conduct, Santos has a clear set of values, policies and procedures to guide the actions of the Company and employees in all the areas of the business.

0

‘02

‘03

‘04

‘05

‘06

Contractor

Combined

Santos employee

Santos’ employee injury frequency rate continued to fall for the fifth successive year but the contractor injury frequency rate increased, resulting in the total recordable case frequency rate increasing to 6.4 in 2006.

This includes an integrated code of conduct which prescribes that, in addition to compliance with all applicable legal requirements, all employees are expected to adopt appropriate standards of professional and business conduct in their dealings on behalf of Santos.

The table on page 24 summarises the areas covered by these systems and policies.

One of Santos’ systems is a comprehensive Environment, Health and Safety Management System (EHSMS) used to define performance expectations and accountabilities, and to monitor and continually improve performance.

Annual audits of EHSMS implementation show a number of Santos sites have reached or are approaching the continuous improvement zone, reflecting a fully functioning and improving system in place.

The EHSMS is a dynamic system which is continually being improved to ensure it is current and aligned with the changing nature of Santos’ business.

Port

Ballera

Moomba

Eastern

Mereenie

Production

Drilling &

Common

Mutineer

Bonython

Plant

Plant

Queesland

Central

Petroleum

Processes

- Exeter

EHSMS MANAGEMENT STANDARD ASSESSMENTS % implementation

100

80

60

Continuous Improvement Zone

Engineering

2006

2005

2004

40

20

0

2003

Fairview

26 Santos Annual Report 2006

More detail about this and the other systems Santos has in place can be found in the Corporate Governance section which begins on page 36.

In 2006, Santos launched a Reporting Misconduct program where employees can confidentially report non-compliance with laws and regulations and Company policy and procedures without fear of reprisal or discrimination.

The Reporting Misconduct program reflects corporate best practice and is an additional last resort mechanism to report non-compliance.

SAFETY FOCUS CONTINUES

Santos’ safety vision is that ‘we all go home from work without injury or illness’. After achieving its best ever safety performance in 2005, with a total recordable case frequency rate of 4.9, Santos had a mixed performance in 2006.

The employee injury frequency rate continued to fall for the fifth successive year but the contractor injury frequency rate increased, resulting in the total recordable case frequency rate increasing to 6.4 in 2006.

Baseline in 2006

Indonesia

United

EHS &

Patricia

States

Operations

-Baleen

Support

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