Petro-Canada’s Fifth Annual Report to the Community (http://208.38.59.18/eng/about/11070.htm) provides a review of the company’s performance in 2004 in the areas outlined by the Principles for Investment and Operations www.petro-canada.ca/eng/investor/9337.htm: Business Conduct, Environmental Protection, Working Conditions & Human Rights and Community Participation. The report is also an important part in maintaining an ongoing dialogue with the company’s stakeholders, allowing them to assess the company’s progress against its principles of responsible conduct.

Petro-Canada’s commitment to the Global Compact is expressed through its Principles for Investment and Operations (www.petro-canada.ca/eng/investor/9337.htm), through the 2004 Report to the Community (http://www.petro-canada.ca/eng/pdf/pc-rttc-04-000-e.pdf) and on its website (http://www.petro-canada.ca/eng/about/11003.htm). The Company’s implementation of its Principles is highlighted on the “About Petro-Canada” section of its website (http://www.petro-canada.ca/eng/about/4857.htm).

Throughout 2004 Petro-Canada continued to make progress on implementing the principles of the UN Global Compact.

· Human Rights (http://www.petro-canada.ca/eng/pdf/pc-rttc-04-007-e.pdf)
Petro-Canada continued to integrate Human Rights principles into business practices in 2004. Some of the activities in 2004 included:
o An internal working group was formed to define our internal framework for the protection of human rights, endorsed by the Executive Corporate Responsibility Steering Committee.
o Two areas were identified as needing to be strengthened: the first regarding the use of security forces; and the second a recommended improvement in human rights assessment, monitoring and reporting processes.
o Work progressed in 2004 to develop new security guidelines, to be reviewed and endorsed by Petro-Canada’s Executive Corporate Responsibility Steering Committee by mid-year 2005.
o In the International Business Unit, work is underway to embed consideration of human rights into operations risk assessment processes.

· Labour Standards (http://www.petro-canada.ca/eng/pdf/pc-rttc-04-007-e.pdf)
Petro-Canada continues to uphold the Principles set out by the UN Global Compact:
o At year end 2004, approximately 24% of Petro-Canadian employees were represented by collective bargaining agreements.
o Negotiations are ongoing with Terra Nova employees to reach a first agreement.
o Petro-Canada supports a wide range of learning opportunities for employees, ranging from leadership development, job-specific technical training, participation in industry conferences, post-secondary education and project assignments.

· Environment (http://www.petro-canada.ca/eng/pdf/pc-rttc-04-006-e.pdf, http://www.petro-canada.ca/eng/about/10983.htm )
Petro-Canada is directing increasing resources to the management of environmental issues which include air, land and water:
o Petro-Canada reports to the National Pollutant Release Inventory (NPRI), reports on the amount of greenhouse gas emissions and implements energy efficiency initiatives in the design and operations of its facilities.
o In 2004, six management system audits were completed within the company of various facilities to identify improvement opportunities to be incorporated into the annual workplans for implementation.
o Petro-Canada has taken a phased approach to ISO 14001 certification and to date all Downstream facilities have completed certification.
o In 2004, Petro-Canada made significant water conservation strides through the use of treated water rather than river water and by reducing the amount of water used in water floods.
o Environmental and operating expenditures in 2004 were $651.3 million, an increase of $236.9 million from 2003. This was mainly due to preparations to meet new federal limits for sulphur in gasoline and diesel fuel.

· Anti-Corruption (http://www.petro-canada.ca/eng/pdf/pc-rttc-04-004-e.pdf, http://www.petro-canada.ca/eng/about/10977.htm )
Petro-Canada conducts business in a highly principled manner guided by the Code of Business conduct and corporate values and principles. Petro-Canada’s office of the Chief Compliance Officer advises employees on how to perform their duties without violating the provisions of the Company’s Code of Business Conduct or global legislation dealing with corruption.
o In 2004, about 1,740 employees participated in online training about their obligations as required by the U.S. Foreign Corrupt Practices Act and Petro-Canada’s Policy for the Prevention of Improper Payments.
o Close to 500 employees who are involved in International operations, contracting services or products, or consulting with public officials and government representatives participated in a workshop called “The Way We Do Business: A Workshop on Business Integrity”.
o Petro-Canada has established a confidential Ethics Hotline through which employees can report suspected accounting, audit or other financial irregularities. They can also use the Ethics Hotline to report other possible violations of the Code of Business Conduct or Policy for the Prevention of Improper Payments.

Petro-Canada’s performance achievements in 2004 are summarized in its Annual Report to the Community and are highlighted by (http://www.petro-canada.ca/eng/media/10324_11549.htm):
· Lowering green house gas emissions by 4%, compared to 2003;
· Achieving a 6% decline in injury frequency rates and 50% decline in environmental exceedances, compared to 2003;
· Being recognized for best practice corporate governance;
· Providing business integrity training across the organization; and
· Continuing to support communities, including investment of nearly $7 million in the areas of education, health and community services, environment and arts and culture.
· Several new safety initiatives were implemented in 2004 in support of Petro-Canada’s “zero harm” culture (http://www.petro-canada.ca/eng/about/11004.htm), including incorporation of new corporate wide performance measures related to employee and contractor engagement, and illness and injury prevention.