Advancing six major growth projects requires us to work with a large and diverse contractor workforce. We expect contractors and consultants who are acting as Petro-Canada’s agents or working on the Company’s behalf to act consistent with our practices and policies.

One of the elements of our Total Loss Management (TLM) system sets out requirements for engaging contractors. The process starts by assessing the nature of risk inherent in the task to determine qualification criteria and determine which of our TLM elements are relevant to the engagement. The TLM criteria are communicated to the bidding contractors so that they understand our expectations and the resources required to meet them when bidding for the contract. In evaluating bids, the weighting given to TLM compliance is proportionate to the level of risk and complexity of the work. The terms of contracts reflect agreed expectations. Contractors are required to follow predetermined safety requirements specific to the various operations within the business. Requirements include items such as site specific pre-work meetings, safety orientations, regular safety meetings, risk assessments, safe work permits and procedures, safety training, protective equipment audits and corporate safety initiatives. We follow up with regular site visits to confirm that our standards are being observed, and contractors are regularly included in site safety meetings and corporate safety initiatives. A contract close-out process is put in place to confirm that the site has been left in an environmentally acceptable and safe state.

The focus of our contractor management initiatives to date has been on safety performance. While we had seen our contractor Total Recordable Injury Frequency (TRIF) decrease over the past several years, the fact that contractor recordable injuries are three times higher than employees reinforces the need to ensure we continue our efforts in this area. We are very pleased to be seeing good results from this focus, with the 2008 Contractor Recordable Injury Frequency (CRIF) decreasing by more than 20% to levels below that of 2006. However, the project-focused work done by contractors and a higher turnover rate in a contractor workforce means that we need to be more diligent and proactive to sustain that success.

We may consider, depending on workforce capacity, bringing a temporary foreign contractor workforce into Canada for our major projects. Prior to the economic downturn, we had conducted a very detailed social risk assessment as part of the planning stage for considering a temporary foreign contractor workforce.

We also employ a large local and international contractor workforce as we develop our production projects in Libya and Syria. These situations present potential human rights and employee practice risks. We have developed a contractor Code of Conduct (The Code) that outlines our safety, community, business conduct and human rights expectations in concrete and meaningful terms that resonate in a situation-specific context. The Code will be provided to contractors as part of their contract and an Arabic version will be visible on our work sites in our North Africa/Near East operations.

We also recognize that we have a valuable role to play in mentoring and supporting the development of local contractors. In Canada, we are implementing local procurement guidelines to support the development of Aboriginal communities, particularly those in the Athabasca Oil Sands region. These guidelines will help these communities bid on and participate in the economic benefits of the contracts that we will award for our oil sands projects. The same approach will be taken in Libya, where we have a commitment to develop the capacity of the local entrepreneurial economy.