APPENDIX 2
Memorandum submitted by BP
INTRODUCTION
BP is one of the world's largest petroleum and
petrochemical groups. BP's main activities are the exploration
and production of crude oil and natural gas; refining, marketing,
supply and transportation; and manufacturing and marketing of
petrochemicals. BP also has significant interests in renewable
energy especially in the manufacture and use of solar photovoltaic
products.
BP is involved in a variety of activities and
businesses in South East Asia and in some countries we operate
under our Castrol (lubricants) brand. We operate in the following
ASEAN counties: Indonesia, Malaysia, Singapore, Thailand and Vietnam.
We have exploration and production operations for oil and gas
in Vietnam and Indonesia. In Vietnam, Singapore, Malaysia, Thailand
and Indonesia we operate a variety of marketing businesses ranging
from the manufacture and sale of lubricants and chemicals to aviation
and marine fuel.
BP's exploration and production interests, anywhere
in the world, depend on the area's natural resources. Consequently
when we commit to any area, such as Vietnam or Indonesia, the
very nature of our activities means we have to make significant,
long-term decisions. Our marketing activities are obviously somewhat
different but certainly we regard our lubricants business as a
significant growth area in South East Asia. Due to the very different
activities that we are involved in, we tend to treat each country
quite individually. However, some corporate and social networking
is done on a regional basis.
INCENTIVES FOR
FOREIGN INVESTMENT
As stated above, BP is primarily attracted to
areas where there is appropriate natural resource but obviously
it is beneficial if regulatory and fiscal regimes are attractive
and above all, stable and consistent. Singapore, for example,
does offer financial incentives, promoting an attractive environment
for companies to operate in. We can, and do, operate in many very
different countries and have to adapt to very different legal
and regulatory systems.
BUREAUCRACY AND
CORRUPTION
BP has global standards and policies, embracing
health, safety and environmental issues and employment regulations,
which we adhere to wherever we operate. These are always at least
consistent with, if not higher than, the standards required by
other countries. However, in any country where transparency is
lacking or corruption is rife, a company like BP may be disadvantaged
because our codes of conduct might greatly exceed local standards.
Despite these short-term problems, it is in the long-term interests
of our shareholders and important for BP to retain our integrity
and we do not complain or have a problem with this.
Joint ventures are a common practice in the
energy sector globally and indeed local partnerships are often
a condition of doing business in certain countries. We generally
find that this is a very positive way to operate to both parties
mutual advantage; our scale and global experience coupled with
local knowledge, access and support contributes to the sustainability
of the business.
EXPORT MARKET
POTENTIAL
Whilst BP may be experienced in foreign trade
we also appreciate the help and support given to us by UK Trade
and Investment (UKTI). Obviously they are of more assistance to
small and medium sized companies with limited resources but they
do provide an alternative source of contact for us with the UK
government. The support varies from country to country.
We have had many positive experiences with UKTI,
for example, the Malaysian branch in Kuala Lumpur, has been very
active in various areas not just in trade activities but also
in promoting good business ethics through corporate social responsibility.
BP has been heavily involved with the UKTI and Malaysian Chamber
of Commerce in this regard.
In Thailand, Bangkok, the UKTI is very good.
They are readily available and get involved at all levels collectively
for British Chamber of Commerce members and also help to facilitate
meetings and contacts with companies directly.
In Vietnam the UKTI is also very active. They
are very good at facilitating knowledge sharing which is something
that BP has also been heavily involved in.
There is limited support in Singapore, and the
UKTI is probably constrained by the EU structure whereby Free
Trade Agreements (FTA) can only be entered with the EU and not
individual EU countries. Whilst FTAs may constrain some companies,
this is not currently an issue for contention for BP.
21 October 2004
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