Sustainability Practices In Pakistans Downstream Petroleum Sector

Published Date: 02 Nov 2017

In today’s competitive environment companies are working to maximize their shareholders wealth. But that’s not the only thing which is important. We have one world to live where we have scarce resources and one clean environment where we can breathe, so there is a need of sustainability development. Through sustainability, organizations are not only survive but they can build nation by making world environment friendly, creating employments and engage with people by doing social causes. International Companies are more focusing on sustainability factor as it may give profit later to the organization. If organization commits to practicing sustainability then it may have a competitive advantage against a conventional company with no sustainability.

Petroleum sector generates the most severe effects on Environment. It is largely contributing in sustainability development globally, therefore it has central focus as it is related to health of million and billions of people around the world. Downstream petroleum sector which includes oil refineries are working at grass root level in world. They have major impact on the sustainability as they are working in operations, processing and storage of crude oil where there is a most need to understand the social, economic and environmental aspects of sustainability. Furthermore one segment of Oil Marketing Companies has also impacting on the environment by not ensuing the standard procedures that need to follow. Today there are severaloil marketing companies and refineries working in Pakistan. But what sustainability practice are they following are the main focus of our research. Is international organization also following same set of procedure worldwide or there are any changes & what issues Pakistan is facing to reach sustainability.

The scope of study is limited to 7 companies. As industry is divided into OMC’s and refineries, we split the interview and questionnaire into 4 refineries and 7oil marketing companies. We learned about which activities usually downstream petroleum companies followed while pursuing sustainability in their operation, distribution networks and processing.

The objective of this research is to ascertain the facts and figures of multinational and local along with the combine practices they follow to implement the effectiveness of sustainability. We found what part the companies are considering, carrying out, not considering or not carrying out to have sustainability.

The increased role of other non-governmentalcompanies, media and international organizations also played great role to emerge sustainability as a key to business.

Introduction

The Population of the earth grew by 1.15 percent last year, which evidently will increase the consumption, more and more product have to be manufactured for consumption. Thomas Robert Malthus theory has adequately described that "if human population was allowed to increase in an uncontrolled way, then the number of people would increase at a faster rate than the food supply. A point would come when human population would reach the limit up to which food sources could support it. Any further increase would lead to population crash caused by natural phenomena like famine or disease." Therefore sustainability is very crucial for the world and to satisfy the need of future human being. In order to achieve sustainably human being have to be vigilant in their consumption. They need to be more cautious toward the impact on third planet. Earth has scarce resources that has to be properly managed. Therefore Sustainability has become a new buzz in the world.

The word sustainability is derived from the Latin sustinere, mostly define as "maintain", "support" and "endure". Since 1980s sustainability has been used more in the sense of human sustainability. Brundtland Commission of the United Nations was first to conceive the concept sustainable development, on March 20, 1987: "sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs. "Before which Cooperate social responsibility (CSR) was term used by companies 1970’s which means allocates responsibilities of companies to deal with societal issues on a voluntary basis and in collaboration with stakeholders. Exceeding economic responsibilities and legal compliance, society expects from companies that they additionally take ethical responsibility and engage in philanthropic activities contributing to further societal goals. In late 1990’s Brundtland Commission was replaced by Cooperate Sustainability (CS) and rephrase into triple bottom line, Triple bottom line include economic, environmental and social. These are considered the three pillars of sustainability. Corporate sustainability (CS) management aims at managing ecological, economic and social effects, firstly to achieve a sustainable development of the organization and the core business, and secondly, to create with its business a positive contribution of the company to a sustainable development of the economy and society at large. Corporate sustainability strives for a systematic management and coordination of all corporate activities and the integration of social and environmental.

The Corporations have a very important role on sustainability; their impact will be transmitted on the future generations. The developed countries are more aware about the importance of sustainability as compared to developing and emerging countries, but globalization is bring a change soon this concept of sustainability will be part of organizations SOP.

The organizations are improving efficiency by adopting sustainability, as sustainability has a greater role toward contribution in corporate social responsibility. Sustainability will not only provide benefit to particular niche, it will create a synergy of resources and provide greater value.

The sustainability portrays the image of future oriented organization. Those organizations who successfully implemented sustainability are aim towards different dimensions that help society, creating a good economical and natural environment; create transparency in processes, employee development and ethical practices.

Yet, many nonprofit organizations believe that not a lot is being done on sustainability, their researchers have found that companies mislead or exaggerate their efforts toward sustainability. Some of these organizations are World Business Council of Sustainability, Global Reporting Initiative, United Nations Sustainable development, Global Climate Campaign, Greenpeace and Health and Environment Alliance.

The United Nations Sustainable development focused not only on the environmental and economic aspects but it covers a wide range of social parameters like increasing population problems due to scarcity of resources and increase demands. Furthermore child labor, children’s in the developing world, poverty reduction, inequality, allocation of extractive resources and social contribution are also considered in sustainable development. UNSD started to work as a global center of sustainable development.

UNSD is catering both programs in Public and Private sector. In public sector it is measuring progress through GDP and in private sector the triple bottom line and regular reports system of all public traded companies. It is all about making life of man sustainable by managing all resources in developing countries.

World Business Council of Sustainability emphasis that firms can protect the environment and can economically grow at the same time. Since its start in 1992 the council plays the leading advocacy role for business, bring more than 200 member companies together to share their best practice on sustainability development issues with the world and to develop new innovation tool for sustainability.

The main concern for petroleum sector is the emissions and land pollution due to the nature of their operations. How much environment damageable gases are they producing like CO2, and NOX. The refineries are adopting new technology to cut down the carbon foot print as many Governments have introduced a Carbon tax. These companies are tries to achieve the standard, guidelines and technique that are being followed by the world

The decision making tools for sustainability for organization such as Life Cycle Assessment, Global Efficiency ratio, environmentally conscious program and balanced scorecard are used. All of this can play an important role in improving the environmental and sustainability performance of firms. Besides different environment and sustainability reporting system has been established to make countries to follow these criteria. For instance Triple Bottom Line reporting system has been introduced in many countries instead of usual annual reports which refer to the expansion of traditional accounting of financial performance to include environmental and social performance. Through which companies are liable for including all those cost that destroy environment. Moreover supplier’s code of conduct is also considered with reference of sustainability through Global Repository Initiative and Environmental Sustainability Index

Sustainability in Petroleum Sector

The main focus for achieving sustainably for petroleum sector is to use of renewable energy resources by making energy through natural resources. Using technology will help creating viable and sustainable alternatives for fuel and power in areas including biomass, hydrogen and wind.

There are many factors that impacting oil companies to implement sustainability such as the adoption of new legislation could impact the long-term behaviors and investments of oil companies. Petroleum sector are central of attention for sustainability concern and the most obvious reason for that is the value of this scarce resource. There are many end uses of petroleum products such as lubricant, fuel and asphalt etc. Petroleum sector have to create a sustainability development because they are deeply involves into sustainability matters, such as different practices of petroleum extraction and processes that are directly involves in environmental impact and global warming, also the high prices in many countries also plays a role that effecting economic moral. Moreover governance and employee development is also a major concern in the organization with respect to corporation sustainability.

At downstream the environment friendly fuels are not used as downstream sector is less concerned of increase amount greenhouse gas emission. Furthermore at production side they are least bothered about the wastage draining systems

Issue of sustainability in Petroleum Sector

Today our planet is facing lots of environmental issues. There are many threats like climate change, energy, water, biodiversity and land usage, chemicals, toxic and heavy metal usage, air pollution, waste management, ozone layer depletion, ocean and fishery, deforestation and many more. These are the significant issues which the countries are facing now days.

The global warming is the major cause of climate change. Many governments have realized global warming as an issue but do not focus on the causes of simultaneously. Moreover the energy is generated by burning fossil fuels and its damaging the environment. The electricity is generated by coal, oil and gas fire power plants all over the world. The electricity can be produced through solar, wind and hydro among others but this process is followed at very small scale.

Many of the companies do not focus on the water pollution. They are polluting water and such water is used for the agricultural purpose which is leading to unsustainable irrigational practices. Australia is facing this issue. Furthermore the un-sustainability of the land leads to the depletion of it and this effects the ecosystems of the earth. The degradation of land and resources will lead to several problems for all living organisms.

The different organizations use chemicals which are toxic and by using these chemicals, the factories releases unhealthy gases which pollute the environment. Once the environment get polluted then it is very difficult to restore it. Many of the companies do not focus on managing the waste and also doing deforestations. As the population is increasing day by day, waste management has become one of the difficult tasks to do. The companies have to produce more to meet the demand of their customers.

Most of the people think that the global warming is caused by burning of oil, gases or by the use of toxic chemicals in the factories. But deforestation and greenhouse gases emission in the atmosphere are also big reasons for global warming. As you know that greenhouse gases already exist in the atmosphere which is necessary for the atmosphere to keep the earth warm, but the due to excessive emission of greenhouse gases, burning of oil and gases, generating electricity by burning coal and fossil fuel are causing climatic changes. These climatic changes cause floods, increasing heat in the atmosphere and effecting earth in different ways.

Thus the huge amount of waste cannot be controlled by the organization. Sustainability does not only link to the humans, but also to the environment and biodiversity also. The organizations have to take necessary steps to restore the resources they are using and also give back to the society.

Sustainability in Pakistan

The sustainability is now one of the basic concerns of big organizations. The leading companies in Pakistan are concentrating on the sustainability. Previously these companies were operating without sustainability. Most companies in Pakistan are not aware of the sustainability issues. But gradually the companies are trying to integrate sustainability in their companies and they are trying to contribute to society by investing in social welfare. Recently, the companies have expanded drastically and this helped the society by reducing the unemployment in the country. On the other hand, due to increase in consumption, the companies have to produce at the large amount.

In Pakistan, the companies are concentrating on the sustainability factor slowly and gradually. Companies like Pakistan State Oil, Pak-Arab Refinery Limited Company and the Pakistan Refinery Limited are reporting about what these companies are doing mainly for sustainability. Now reporting for sustainability is important because companies are recognized globally when they inform others that what they are contributing to resolve sustainability issue. This will project a better image of the organization. The international buyers will keep this in concentration if they are investing in Pakistan, then they will make sure that the companies are contributing to the welfare of the society and atmosphere.

Now the companies in Pakistan are not following any given standard, very few companies have initiated to follow Global Reporting Initiative and realized the importance and need of reporting sustainability. So the companies are focusing on how they can do more for the environment and society. Hence sustainability development for companies going to be more essential in the future.

The Problem

Consumption of oil products growing rapidly in Pakistan, sustainability of scarce resources has become essential and organizations have to incorporate sustainability strategies to optimize resources

To identify the sustainability practices and issues in Pakistan’s Petroleum downstream sector as there is need for awareness and implementation of environmental, social and economical

Objectives

To measure the sustainability practices and opportunities for sustainability development for petroleum downstream sector in Pakistan

To compare existing practices of sustainability in petroleum downstream sector with reference to the international context

Justification

As petroleum is one of the important resources for production, sustainability in petroleum industry will bring a major impact for future generation. Organization should adopt sustainability before it is forcefully regulated by authority.

Limitations

The first limitation is of time for completing this research. Other limitations are accessibility to the resources i.e. that respondent may not to oblige to reply and lack of awareness for sustainability.

Scope

The scope of this research is for Pakistan. It will appeal companies to adopt sustainability as a code of conduct, before authority imposed sustainability practices on their operation or on petroleum sector.

Assumptions

Sample size for this research based on company that has major shares in the market and is assuming that their result represents the whole sector. Secondly in companies sustainability is defined as economic, social and environmental

LITERATURE REVIEW

Supply chain plays the important role as leverage for efficiency. The chief supply chain manager is accountable for the complete product life cycle which concluded product origin (Concept and design), inbounding, manufacturing, and logistics till it reaches to the customer. The supply chain people are very much responsible for social, economic and environmental impact. (The Sustainable Organization: The Chief Supply Chain Officer’s Perspective, 2012)

The sustainability practices with the context of our research on downstream petroleum sector it provides knowledge about different techniques of Sustainability. It explains that sustainability can be achieved through the use of environmental friendly fuels reduce of greenhouse gas emissions, saving energy, making various waste techniques, solid land filling and using perishable products. In addition it also elaborate that sustainability cannot be measured and controlled isolated or in open supply chain. So the closed supply chain systems are implemented, which brings sustainability practices to local sector but also at Global level. It also explains the various ways to measure the decision making tools for sustainability for organization such as Life Cycle Assessment, Global Efficiency ratio, environmentally conscious program and Balanced scorecard. It plays an important role in improving the environmental and sustainability performance of firms, besides different environmental regulations and sustainability reporting system has been established by world to make countries to follow these criteria. For instance Triple Bottom Line reporting system has been introduced in many countries instead of usual annual reports which refer to the expansion of traditional accounting of financial performance to include environmental and social performance. Through which companies are liable for including all those cost that destroy environment. However, supplier’s code of conduct is also considered with reference of sustainability through Global Repository Initiative and Environmental Sustainability Index. To address the need for measuring sustainability of a global supply chain, a simple framework based on the traditional dimensions of sustainability: environment, society, and economy has been viewed that further sub divided to understand the aspects of manufacturers, suppliers, governments, and consumers — to take a broader view of sustainability. According to Ivan Montel the two different approaches of Corporate Social responsibility (CSR) and Corporate Sustainability (CS) although both share the same dimensions which intends to focus on social, economic and environmental responsibilities. CSR is mostly used term since 1970's but CS comes from late 1990's.CS includes more the social issues. Ivan has also discussed the other new terms after CS such as Environmental Management (EM), Corporate Social Performance. It clearly explain the fine line between CSR and CS, as CS deals with the social responsiveness meanwhile CSR deals with the environmental aspects. However Environment is the sub set of social responsiveness so CS is more wide term as compared to CSR. Indeed, the conceptualization of CSR that integrates economic, social, and environmental aspects and the triple-bottom line. From a practical perspective, companies use both the CSR and CS as inter-exchangeable. If we have a look at the Global Reporting Initiative (GRI), the overlappingof these two terms becomes even more evident.

ISO 14000 is an international standard based on the environment management. ISO14000 focuses on the reducing the factors that are effecting the environment negatively, ensure that the laws and regulations are being followed accordingly and the improvement of the systems. This standard elaborates the framework which the companies should follow in order to keep the environment safe. The benefits of following this standard are there will be reduction in cost of distribution, wastages, consumption of power, save the environment and the most important continuous improvement of the systems and procedures.

United Nations Sustainable development focused not only on the environmental and economic aspects but it covers a wide range of social parameters like increasing population problems due to scarcity of resources and increase demands. Furthermore child labor, children’s in the developing world, poverty reduction, inequality, allocation of extractive resources and social contribution are also considered in sustainable development. UNSD started to work as a global center of sustainable development.

UNSD is catering both programs in Public and Private sector. In the public sector it is measuring progress through GDP and in the private sector the triple bottom line and other regulatory report systems are measuring progress, for all public traded companies it’s all about making life of man sustainable by managing all resources in developing countries.

The importance of sustainability practices in today’s scenario. Company’s now generating sustainability reports with annual reports. Due to increased demand of customer and consumer to know how products are environmental friendly make companies to work on Sustainability, Such as Wal-Mart launched the sustainability Product Index. Furthermore Media and other governmental rules make it so important that shareholders started to take interest in sustainability.

These Key Performance Indicators (KPI) are Greenhouse gas emissions, CO2 gas emissions, solid waste emissions relative to landfill capacities, social impacts related to social needs. The most important emerging factor in developing KPI’s is Life Cycle Assessment this assessment includes from all processes that convert input to output and how it impacts on the environment. It also quantify and track all the inputs such as material , electricity , fuel , water and how it effects on the output such as carbon emissions and solid landfill. Once all these related cost started to known then this can be help organizations to save the cost and increase revenue. These cost should also be added up to the financials then it will show exactly how sustainable processes are company following. It also increase the business performance of an organizations (Park C, 2009)

Oil Companies and Sustainability

The practices of sustainability oil industry are following. Their main focus for achieving sustainably for them is use of renewable energy resources by making energy through natural resources. Using technology to help create viable and sustainable alternatives for fuel and power in areas includes wind, biomass and hydrogen. Three main Oil companies will be focused i-e Shell, BP and ExxonMobil.

Besides it also explains the changing preferences of oil companies from energy to oil with increased rates of pollution in last five years. The data is graphically represented able and data is extracted from the annual reports of the oil companies such as Shell, ExxonMobil and BP.

Furthermore what production practices they are following, how much environment damageable gases are they producing like CO2, NOX and how much they are investing in renewable energy resources. Not only this, various techniques such as Shell’s project to reduce emissions of CO2, is only renewable sources but by developing and testing the technologies to process and capture CO2 and store it in a safe way underground. Laws require Companies to report operational emissions, while still companies are trying to encourage customers to use less fuel or more fuel-efficient vehicles

There are many factors that impacting Oil Companies to implement sustainability, Such as the adoption of new legislation could impact the long-term behaviors and investments of oil companies. Many media channels, including nonprofit funded sources, publish environmental or corporate responsibility rankings each year. The existence of professional and trade associations define normative rules for an industry and shape companies within the industry. In exchange, each company benefits from shared information and a certain buffering that comes with membership in a powerful trade organization.

Shell Sustainability

This shell report explains the various techniques which shell pursuing as a global company. First and foremost shell is working on more toward the generation of sustainable energy development that means generating energy from renewable energy resources as generating power from the natural gas produce 50-70% less CO2.such as Tight gas,LNG, LNG floating and various other techniques by using advanced technology. On the other hand shell is also focusing on the issues of climate change to limit the global temperature by midcentury to 2C.

Shell in other countries also working on the theft and illegal oil refinery activities. Making transport more sustainable use of bio fuels can also create a difference and reduce the CO2 gas emission. Shall fuel save technology introduce through which it saves 1 liter petrol of 50litres tank that reduces energy loss in engine. It was launched in 2010 to cut trucks operating cost.

Shell has also introduced the road safety programs in schools for safety. However shall is using multiple new monitoring system to help drive and improve their performance. Some of new Shell projects are to know the amount that how much exactly we drive in Middle East and Asia. This may help to know the actual consumption and how much it polluting the society. On whole safer products, better drilling and ecofriendly packaging are main important goals to reach (Shell, 2010)

British Petroleum Sustainability

It explains that how petroleum industries are focusing more on CSR and they adapt to technological transformation as part of a deeply interconnected world. Today, if business disregards the environmental and social consequences of its actions, ultimately this threatens performance and hence profitability. So, financial, social and environmental performances are inseparable. Sustainability not only comes from social and economic perspectives but from sustainable developments as BP has introduced ultra-low sulphur fuels in nearly 60 cities in two years. Future will be about low-sulphur products with emissions approaching zero. BP is already leading many areas relevant to the development of a hydrogen-fuelled economy in both the transport and power industries and is exploring potential pathways to provide hydrogen as a transport fuel. Furthermore it also working on different fundraising volunteer programs for environment. The oil business is hugely impacts on the environment and now not only companies but the stakeholders, government, regulatory authorities and media all are interested to running a business that is successful, responsible and provides mutual advantage to all its stakeholders within society. (Ramashia R, 2007)

As organization expending the sustainability becoming fade and organization’s goals and targets are remains the only focus. Failing to pay attention to the company’s sustainability results poor organization and management and also reflecting high risk. From the view of sustainability, Economist Intelligence Unit (EIU) in 2008, declared supply chain as the weakest link. In 2010, united nation and global compact research initiative discover that 88% of CEO felt importance of sustainability and willing to integrate supply chain with the sustainability. (The Sustainable Organization: The Chief Supply Chain Officer’s Perspective, 2012)

Many leading and big organizations are now considering sustainability as a major tool for transforming into future territory, they shifting their focus from their regular fulfillment to the performance that drive not just sustainability but increases organization life. By connecting with sustainability, organization derives to capture more market share, improving customer satisfaction and increase brand appeal of the organization. (The Sustainable Organization: The Chief Supply Chain Officer’s Perspective, 2012)

Consumers are now well informed with respect to sustainability, which increases demand for the products which processed through sustainability procedures. Traditionally through supply chain perspective it causes lower margins, also historical approach for fulfillment this demand can also causes hurdle but with time it is identified that by following sustainability organization can get multiple benefits with respect to better performance, overall brand image, quality principles, efficiencies, managing risk and innovation. (The Sustainable Organization: The Chief Supply Chain Officer’s Perspective, 2012)

Organization and its supply chain impact numerous people and communities, these organization are also responsible for the consumption of scarce resources (water, energy and waste) and also their process of production impacting environment as well, which makes these organization liable and in return they follow CSR activities, providing economical advantage to the customer and follow standards that can lessen harm to the environment by reducing carbon foot print and reducing carbon gas emission. According to the report of carbon disclosure project companies recognized 39% of cost savings due to their work and effort to decrease the carbon emissions. (The Sustainable Organization: The Chief Supply Chain Officer’s Perspective, 2012)

As per the survey of Accenture, it has been identified that it will be more costly in the long term to running a supply chain that is un-sustainable, above 56% considering it is also expensive today as well. According to another research of Accenture, retailers can accomplish saving of 3 to 5 % by following green packing initiatives. Walmart in this context cutting its packaging by 5% in the year 2013, that can lead to expected saving of US $ 3.4 billion and also this will bring US $ 11 billion of saving to the whole supply chain. (The Sustainable Organization: The Chief Supply Chain Officer’s Perspective, 2012)

Recycling is also a way to avoid waste and reuse of scarce resource, recycling of the one metric ton mobile phone can yield 400 gm. of gold with comparison of one metric ton gold ore which yield five gm. Another example of Cisco networks, by reuse of product from 5 % to 44 %, they shifting from US $ 8 million loss to the profit of around US $ 147 million, between 2005 and 2009. Wal-Mart also willing and planning to run scheme for reusing the waste of packaging into different products like hangers for store, baskets of pet and other polyethylene products. (The Sustainable Organization: The Chief Supply Chain Officer’s Perspective, 2012)

Shell believes that by contributing towards sustainability it enhance its business values, appeals to customers, business partners, and employees, and reduces operational and financial risks (Shell, 2011).The guidelines of Global Reporting Initiative’s (GRI) are fallowed in Shell’s sustainability reports. Along with the committee consists of six independent experts who evaluate the report on its relevance and responsiveness to stakeholders (Shell, 2011). Shell defines social performances as ‘an ongoing process that incorporates all the different ways Shell operations contribute positively and negatively, directly and indirectly to the communities and societies where Shell operates’ (Moser, 2005: 1). Shell recognizes that enhancing its social performance and includes the notion of risk management creates a strong business case. (Boele et al., 2001). Whereas for environmental performance Shell´s assess and measure its greenhouse gas emissions, flaring, energy intensity, acid gases and VOCs, ozone-depleting emissions, spills and discharges, waste disposal, and freshwater use. Different NGOs also closely monitors company performance, This is ensures by bring Moderate NGOs, like Earth watch on board, which along with Shell assess in the changing demands in society (Shell, 2011). One of the largest NGOs "Friends of the Earth" following Shell’s performance. They also issued a complementary report on Shell’s performance after shell release of its sustainability reports in 2002 and 2004.

Pakistan’s Sustainability and Environmental Prospect

According to the News, 2012. Pakistan’s import bill for oil has been increases by more than 43 per cent and extent to $ 12.58 bn. There is also a rise in petroleum crude importing by 9.89 % to $4.228 bn. In contrast of huge import of oil and petroleum, Pakistan having a rich resources of renewable energies, which is very much reliable and cheap, also which can improve infrastructure. By using Non-renewal energy like petroleum and coal require dangerous drilling and mining process and exploration of which is also need a costly budget. There is phase starting by groups of environmentalist, who showed interest for hydroelectricity, solar and wind energy. Pakistan is also focusing on development of wind power plant in Ketibandar, Jhimpir, Bin Qasim, Gharo and in different regions in Swat.

In the seminar for petroleum policy 2012, it was claimed that Pakistan is mainly depended upon oil and gas for generation of energy. Pakistan produces around 62% of the energy from oil and gas, while coal was responsible for .15 %. It was also said that Thar coal is hardly 10 per cent overstated the claim of meeting energy and fuel needs for around 50 years.

According to UNDP 2009, about 73% of Pakistani population living underneath US$ 2 per day and 17% living below US $ 1 per day, which reflecting that sustainability is not the principal concern in businesses for the country’s majority population.

Sustainability awareness brings vital change in emerging countries like China and India, causes reduction in poverty level and create a global platform to sit together and think regarding development and long lasting the scarce resources. (TBL)

Pakistan environment is suffering due to the poor natural resource management and continuing high population growth. Major issues are that Pakistan face are deforestation, polluted water supplies, Greenhouse gas emissions and degraded air quality in the urban centers. The Pakistan Environmental Protection Ordinance of 1983 has priorities three main areas for the country's environmental protection efforts: promotion of sustainable development; improvement of efficiency in the use and management of resources; and conservation of natural resources. The major program areas that were targeted were Fourteen for priority implementation, including energy efficiency improvements, urban waste management, pollution prevention/reduction,renewable resource development/deployment, institutional support of common resources, and integration of population and environmental programs

Secondly, Pakistan applied National Environmental Quality Standards (NEQS) (Revised in 1999) to administrate industrial gaseous emissions, motor vehicle exhaust, and noise. However, only 3% of industries were able to pass the test for compliance after implementation in 1999. Due to which enforcement was not effective and the attempts to legislate environmental protection was fallen short, and regulations have not been enforced strongly.

Pakistani environmentalists believe that country's serious air pollution problems are because of poor fuel quality. According to the survey it has estimated that 550 metric tons of lead emissions are generated by vehicles in Pakistan each year due to burning of poor-quality fuel, the resulting air pollution adding about $500 million per year in related health care costs. According to Dr. Asif Qayyum Qureshi, a research various grades of gasoline sold contains 0.35 gm. /liter of lead compare, to merely 0.15 gm. /liter in other countries. Air pollution can be significantly improved if government were to tighten its lax fuel quality standards. The government in 1995 started a Clean Fuel Initiative which was largely ineffective, and now authorities are looking at the possibility of using alternative fuels for vehicles. The CO2 emissions (kt) in Pakistan were reported at 163177.83 in 2008, according to the World Bank. Carbon dioxide emissions are those stemming from the burning of fossil fuels and the manufacture of cement. They include carbon dioxide produced during consumption of solid, liquid, and gas fuels and gas flaring. This page includes a historical data chart, news and forecasts for CO2 emissions (kt) in Pakistan. Pakistan's carbon emissions in 2008reported at 163177.83

According to the Oil and Gas Journal (OGJ 2006) Pakistan has proven oil reserves of 300 million barrels, which are mostly located in the southern half of the country, the three largest oil producing fields are in the Southern Indus Basin. In addition to other oil producing fields which are located in the Middle and Upper Indus Basins [EIA, 2006].

In 2006 Pakistan had consumed approximately 350 thousand barrels of oil and various petroleum products of which, more than 80 percent was imported. The majority of oil imports come from the Middle East, with Saudi Arabia as the lead importer [EIA, 2006], [World Bank Report]. The recent increase of consumption and overall flat oil production, the country had to rely more and more on oil imports mainly from Middle East. Furthermore the local refinery lack of efficient refining capacity that leaves Pakistan heavily dependent on petroleum product imports.[World Bank Report].

The net oil imports of Pakistan are estimated to increase in future as demand is constantly raising these products and production capacity is not sufficient to meet. The demand for refined petroleum products also exceeds domestic oil refining capacity, so nearly half of Pakistani oil imports are refined products. [World Bank Report].

According to Daily Times, 2010, Kamran Lashari, the Federal Secretary of Petroleum and Natural Resources, emphasized on the up-gradation of the downstream oil sector in Pakistan. Moreover, he made realize to the representatives of oil sectors that they should work on the upgradation of refineries and make their products eco-friendly, according to the international standards.

The Pakistan Petroleum Refinery (PPL) is working on the Corporate Social Responsibility (CSR) since it was established. In 1950, PPL started working on the development of Sui Model School (SMS). PPL has also worked for the development of many other areas of Pakistan, either it is operating there or not. In 2001, PPL took initiative for the welfare of the society. They started a separate CSR program named Pakistan Petroleum Limited Welfare Trust (PPLWT). For the implementation of CSR PPL has chosen two ways to follow. First, to donate to well-known organizations which have presence in the effected or backward regions of Pakistan. Second, PPL work with those organizations which have relevant experience in developing maintaining the infrastructure of Pakistan (PPL, 2010).

Pakistan Refinery Limited (PRL) has also worked on the sustainability of scarce resources. Since 2005, PRL is contributing to the society as a whole with the collaboration of U.N. Global Compact Principle. PRL is also working with the Non-Governmental Organizations (NGO) which are providing free services to the society like checkup, surgery and sponsored many NGO which run AIDS awareness programs. PRL is also working for the education sector by constructing and improving the education level of the schools and facilitating the students by providing uniform, books and shoes (PRL, 2007).

Byco is working for the environment, health and safety of the society as a whole. Byco's employees believe that they are responsible for the sustainability. To ensure this believes, they give appropriate training and improve the best practices in the company. Byco has been working for the environmental factor also. They have reduced the emission quantity, control pollution, optimization of recycling the products and reuse them. Byco has set standards to measure the EHS performance. Byco has set a benchmark for the best practices they can do, monitoring what are they doing, using the latest and best technology which can reduce their cost and also save the environment. In order to improve the environmental, social and economic sustainability, Byco is improving the way of life of the people along which they live in. They are providing drinking water, medical relief camps, supporting the flood victims, contributing in building or improving infrastructure.

Moreover, Pakistan State Oil (PSO) is focusing mainly on the Health Environment Safety (HSE). PSO is working by keeping their operations environment friendly and following the international sustainability standards. They are trying their best to save the environment. PSO has a goal to achieve each year that they improve their performance in terms of technology, systems and programs they are running. PSO is contributing to the energy saving factors. As you can see that the PSO stations are of green and blue color which depicts the environmental friendly atmosphere. Moreover, they have replaced the old lights with light emitting diodes (LED) which saves the seventy five percent of the power consumption. They have installed solar energy panels in order to use the natural resources and reducing electricity consumption. Furthermore, PSO have installed windmill at Buffer Oil Terminal. This generates eighty seven percent of eight hours office electricity (PSO, 2007).

PSO is contributing in CSR activities like providing support to the students by awarding scholarships, supporting different health center to improve the healthcare sector in Pakistan, donations for the relief of flood victims and contribution in promoting sports, supports special children welfare and women empowerment (PSO, 2007).

In the year 2012, oil prices are fluctuated and effect businesses in many ways. The refineries are reluctant to up-gradate and enhanced as the prices are set by government and they have lack of capital investment on these big changes.

Ref: http://www.infomine.com/investment/metal-prices/crude-oil/5-year/

Pakistan crude oil consumption has been increase drastically, and high consumption shows rising demand. Pakistan demand for an oil product is approximately 20 million tons per year with local production capability of 12 million tons per year.

Ref: http://www.indexmundi.com/energy.aspx?country=pk&product=oil&graph=consumption

There is a large demand for oil and petroleum products in Pakistan, the demand still rising but there is also a shortfall of this resource. For dealing with shortage Pakistan is importing refined products.

Research methodology

Research Design

Research will be Qualitative and exploratory in nature. Data will be collected through primary and secondary sources.

Procedure

The information of industry practices will be collected through secondary resources, it will assist in identifying practices in petroleum downstream sector. Afterwards data will be further explore through direct contact with industry practitioners, which will be useful for understanding sustainability involvement in these organizations.

The finding will be compared with international references as well, sustainability standards and industry information will be compare.

Population

Population will be oil refinery industry and oil marketing companies.

Sample and Sampling method

Sample will be based on:

In oil refinery companies it will be Pak. Arab Refinery (PARCO), Attock Refinery Limited (ARL) and Byco Oil Pakistan Limited (BOPL).

In Oil Marketing Company (OMC) sample will be based on Pakistan State Oil, Shell, and chevron.

Software Employed

Microsoft word and Microsoft Excel

Measurement/Instrument Selection

The questionnaire will be used to identify the highlighted things, interview also be taken from convenient sources to get further information and practices.

Plan of analysis

Questionnaire and interview will be analyzed through the sustainability and triple bottom line prospectus, they will determine and identify the organization practice in context of Environment, Social and Economic.

CONCEPTUAL FRAMEWORK

SUSTAINABILITY DEVELOPMENT

GAP ANALYSIS

Practices for Sustainability

INTERNATIONAL AND NATIONAL LAW

SUSTAINABILITY REPORTING

ENVIRONMENT

SOCIAL

ECONOMIC

Environmental Projects

Renewable Energy

Co2 Programs

Recycle, Reuse

Spreading Education

Empowerment

Growth (Overcome Shortage)

PakistanPractices

INTERNATIONAL

DISCUSSION AND ANALYSIS

Pak Arab Refinery Limited Company (PARCO)

Pak Arab Refinery Limited Company (PARCO) was established in 1974, as a joint venture between Government of Pakistan and Emirate of Abu Dhabi. 60% of shares are held by Government of Pakistan and 40 % are held by emirate of Abu Dhabi under Abu Dhabi Petroleum Investment Company, a subsidiary group of International Petroleum Investment Company.

PARCO business activates include Refining, Transportation, Storage and Marketing. PARCO has become a strategic supplier of fuel in Pakistan, It has a marketing joint venture with TOTAL (Frances), refining capacity of 100,000 BPD, storage capacity of over one million metric tons, and is in technical support venture with OMV (Austria). Making PARCO an integrate energycompany and a key player in the country’s strategic oil supply and logistics.

PARCO include Environment, Safety and Cooperate Social responsibility in sustainability, International OHSAS regulation 18001 have become an integral part of management system to guarantee the health and safety of its employees. It is the leading companies that produce more friendly fuel and High speed diesel by its EURO II refinery process, PARCO is also concern toward the environmental impact, and proper disposal of industrial waste.

In order to reduce its environmental impact PARCO has been involve in designing and implementing many Environmental Programs and Policies. One of such polices is about Responsible Operations PARCO believe that environment should be protected and be least harm. Gas emission should be monitored closely and the process should be improved, for example Low NOx (Nitrous Oxide) burners and Sulfur removal from fuel gases. PARCO HSE Department proactively identifies, minimizes and mitigates any situation that has the potential to cause harm to the health and safety of its employees, contractors, the public and the environment. Secondly Perverting the nature at PARCO prioritize as PARCO’s pipeline travels through Kirthar National Park, it plays an active role in wildlife preservation and makes significant contributions to Sindh Wild Life Department, Sindh Environmental Protection Agency (EPA), Research & Development Projects, and National Environmental Quality Standards (NEQS). In addition PARCO has strictly enforced a no-hunting, no-trapping, no-harassment policy. Driving in night through Kirthar National Park (KNP) and MahalKohistan Wildlife Sanctuary (MKWS) is restricted. Installation of tube well, construction of pond for crocodiles and protection of endangered species are carried out.

Even the waste water is through a proper procedure that is environmental friendly. PARCO also has its own Effluent treatment plant that collect all the waste water from the refinery and through skimming, neutralization, dissolved air floatation, aeration, clarification, filtration and drying operations, the effluent water is brought within NEQs limits before discharge into local drainage or reuse for plants. EPA also conduct underground water test and Ambient air test every 2 year of the surrounding areas to ensure that the community nearby is using safe underground water and monitoring NOx, SOx, and CO level in air. The refinery process of PARCO is euro II that is capable of producing Euro II HSD.

PARCO has promptly responded to any natural calamities, such as the earthquake or floods. The floods in 2010, PARCO contributed of Rs 40 million to Prime Minister’s Flood Relief Fund,PARCOIAN’SFLOOD RELIEF account was also opened in the company that contributed over Rs 10 million. These contributions serve around 35,000 flood affected by providing cooked food, more than 1,600 dry food packets. 7,300 flood affected were treated at Medical Camps and 250 families were provided tented accommodation. PARCO also launched an expanded Rs 60 million rehabilitation program to rebuild homes destroyed by floods. In 2011, again provided approximately 750 dry ration packets, 130 tented.

PARCO consider the United Nations Global Compact’s Ten Principles for corporate social responsible. Under these principles PARCO have initiated a many program. The Schools and Clinics Support is one of such program, with an aim to serve the local area residing near its refinery. PARCO has also assisted around 60 Government institutions to developing infrastructure, procurement of equipment, to help them sustain their operations, providing basic health facilities to the communities, construction of classrooms, boundary walls, toilets, underground & overhead water tanks; repair, maintenance and refurbishment of existing facilities, electrification, boring for underground water etc. The institutions were also provided furniture items, water coolers, air-conditioners, deep freezers, fans, medical equipment’s, and medicines etc. While along the pipeline of PARCO 10,000 children, in 48 institutions were offered education.

PARCO education program are not redistricted to rural areas, TCF (The Citizens Foundation) is an active partner of PARCO that has developed two Campuses in QasbaGujrat, Muzaffargarh and Yousuf Goth, Karachi in April 2011. Furthermore, WWF Pakistan has also conducted a Spellathon Project in schools that are being supported by PARCO, National Commission for Human Development (NCHD) held Literacy Centers to improve standard of living, hygiene and health and uneducated females are being taught to read, write and learn the basics of mathematics within five months.

Health initiate are carried under a program of Community Welfare Clinic that provide free of charge medical assistance, Free Eye camps, and A Mobile Clinic. A Road Safety program provide drivers training to comply with Road Safety Rules, PARCO has also partner with National Highways and Motorway Police (NH&MP) to run campaigns on Road Safety by the name of "Safar Asaan" in Urdu language. The HSE department has also drafted polices specially to priorities Employee Care, under which late sittings are discourages, work-life balance is maintained. Employees have also been provided with vast In-house facilities such as Bowling Alleys, an Officers Club, squash and tennis courts, and swimming pools. Tournaments are also held to improve employee’s physical fitness. Scholarships and educational support is also provided to staff. PARCO`s Mid-Country Refinery (MCR) has a School and Ibn-e-Sina Hospital that provide quality education and medical assistance. Another program annually offer sponsorship to 5 Non-Management Staff and 2 Management Staff for "Hajj" (Holy Pilgrimage) annually and dowry grant for the daughters of Non-Management staff.

Byco Petroleum Pakistan limited

BycoPetroleumPakistan limited was established in 1995 as public limited company. In 2004, at MouzaKund, Hub Balochistan, Byco installed a refinery which used to process 30,000 barrels per day. In 2008, the company decided to expand their operations and started petroleum marketing business. In 2008, Byco decided to install a larger refinery in the country, which can produce 120,000 barrels per day, under the new company Byco Oil Pakistan Limited. In 2012, they successfully installed new refinery and become the largest oil refinery in Pakistan. The Single Point Mooring Project, the floating port which can handle very large petroleum cargo vessels. The workforce of Byco is around 800 all over the country.

Byco is Pakistan's largest refinery which deals in oil refining, petroleum marketing, chemicals manufacturing and petroleum logistics. Byco target is get higher profits and focus on the environmental, social, health and safety factors. Byco has the largest storage capacity and greater logistics network that it can easily handle the movements of petroleum from ne place to another. Byco has retail outlets in around 80 cities of Pakistan.

In Byco, all the employees and management believes that they all are responsible for every negative or positive impact on the environment, health and safety. Byco makes every possible effort for continuous improvement and implement best practices so that it will have positive impact. To make this possible Byco gives appropriate training to the employees and educate them.

Moreover, Byco is working for the well-being of the society in which they operate and live in. It has provided fresh water for the people, who live in MouzaKund, relief camps for the flood victims in 2010, promote sports in nearby areas and developed the infrastructure of MouzaKund and areas nearby by repairing road.

Byco is also concerned about the environmental factors. It is continuously working on reducing carbon footprints for that it is reducing carbon emission, reducing wastages and uses every possible way to use the recycled materials. Moreover, Byco is working on management for the safety of EHS, so that they can take immediate action in case of any emergency.

Byco is also focusing on the safety of its employees and for that the company has contractors who support them to look all the safety aspects and follow their Environmental, Health and Safety (EHS) procedures and policies.

To ensure EHS procedures and policies work smoothly, Byco has set benchmark for continuous improvement and new opportunities. Keep on monitoring either the EHS procedures are being followed properly or not.

Attock Refinery Limited

Attock is the Pakistan’s third largest refinery company, incorporated in 1979. ARL is pioneer in oil refining operations since 1922. The total capacity is 42,000 barrel per day. They have the capability of producing energy and non-energy products. Attock producing range of products, such as LPG, naphta, kerosene oil, HSD, LDO (light diesel oil), motor gasoline, furnace oil e.t.c,

Attock refinery is efficiently utilizing their capacity; improvement in the year 2012 is from 97.2 percent capacity utilization to 99.5 percent capacity utilization, which is 14,665 million barrels produced in the current year. Also their revenue increased by 33 percent in the year 2012, but prices are set by government so their profitability is set on these terms. However the rupee depreciation brings a loss ofRupees 990 millions in the year 2012 as compared to Rupees 44 million the year of 2011. The company also knotted in the circular debt of PSO and electricity supplies, which rises to Rupees 42 Billions.

Attock refinery limited are now involves in upgrading and expansion plan for their refineries, they tend to increase their capacities. They plan to upgrade their refinery situation in northern side of Pakistan in next 2 years. They will add two new units for gasoline, to enhance their capability to deal with national supplies. This type of change will bring their capacity to be enhanced from 45,000 barrel per day to 55,000 barrel per day. Hence prices are fixed by government; they cannot provide economical advantage to the citizens by low price or creating a large profit by high price.

Attock is well aware of environmental issues, to deal with that they are involved in many activities such as installation of solar panels for their different production purposes such as distillation and warming water temperature. Moreover ARL is focusing on recycling, for this they processing the used water and reuse them, by reusing water they saves one of the scarce resource. Previously Attock was involved in using polythene bags that can harm environment, later on they changed it to paper bags.

ARL also provide drinkable water for the villages of vicinity. ARL facilitate society by providing hospital, school, deaf & dumb school and also building mosque for the people of nearby. ARL sponsor various sport events, to create a healthy activities in the society.

ARL deeply involves in spreading education and career building. They offer merit scholarship, internship, training programs, study projects and apprenticeship. They also provide merit scholarships to the children of their employees.

Shell Pakistan

Shell is one of the biggest global groups that deal in energy and petroleum products. They are present in more than 70 countries. Shell has more than 30 refinery plants over the world. They have a presence in Pakistan for more than a century; they have around 750 retail stations.

Shell focuses on key areas that can enhance their capabilities and provide environmental friendly products. They enhance potential of natural gas. Shell is highly emphasis on carbon reduction projects such as low-carbon biofuels, they have introduced new technologies for clean environment, and they capture and store carbon the process is named as carbon capture and storage (CSS). To create efficiency Shell is always trying to adopt lean processes for their operations.

Shell emphasis on fuel efficient products, also they promote message for being economical to their consumer by giving efficient driving tips. Oil spill is very harmful for the environment, that directly effecting employees and communities of locality. Shell has adopt new techniques and procedure to control this kind of spills and reduce it. They controlled over oil spills from tanker and create standards that reducing the incident of large spills, they using double hulls ocean vessel. Shell trying to adopt technology that can provide society a clean air and environment. They always update their technologies; their main focus is on resisting carbon emissions, for this they using technology for capturing Sulfur dioxide. They efficiently utilizing the resources and using technologies that help them to avoid waste. In areas where water is scarce they are not using fresh water for production purpose e.g., pearl GTL plant in Qatar.

Shell is the biggest bio fuel producer for transport vehicles that produced from bio plants, which creates them sustainability follower. They produced bio diesel that is reduced CO2 by 70% made from Brazilian sugar cans.

Hydrogen is widely used for transportation, its CO2 depend upon on its development process. Hydrogen is mainly produced through non-renewable energy (fossil fuels), thus for renewable energy shell is involving into the research.

Shell is involved in many CSR activities to empower people and they help the local communities for that. They hired employees from local region to support their families. Shell is also investing in social programs such as Health and Safety programs, HIV AID, Education and skills development programs and enterprise development programs for being a part of the community.

Shell promotes certain education programs with integration of TCF (The Citizen Foundation). Shell and TCF is a program that empowering education by making it common for everyone. Shell provides endowment fund for education which is known as fueling education. In TCF Rahbar program, Shell provides mentoring to the students of TCF and support education. Shell invested in programs for schools that are affected by flood and earthquake. Also they educate 50 students on each TCF campus around Pakistan; they also provide scholarship to truck drivers employed by Shell. Shell also supports higher education in a field of engineering and business studies; they provide scholarship to create a bright future of bright students.

Social Investment project of Shell focused on several areas such as health, education and community development programs that involved in building infrastructure of roads, lighting, safety sign on roads and beautification.

Shell tamer Pakistan is the project that empowers and encourage youth to starting their own business and creating an entrepreneurial culture that makes people to create a career on their desired path.

Pakistan State Oil (PSO)

Pakistan state oil is operating since 35 years and driving the country’s economic wheel as the first public company. PSO has a huge marketing and distribution network and working on various products like Motor Gasoline (Mogas), High Speed Diesel (HSD), Petrochemicals, Furnace Oil (FO), Jet Fuel (JP-1), Kerosene, CNG, LPG and Lubricants. PSO is integrating and attaining self-efficacy by generating new products to fulfill country demand.

Pakistan State Oil believes in corporate social responsibility as a key to success. The core values of PSO i.e. Respect, Integrity, Innovation and corporate responsibility shows importance of sustainability.PSO is working on other energy fuel as an alternative in today’s scenario to fulfill the need of customers. It has been working on the distribution network of LPG Auto gas station by providing alternative fuel.In order to optimize all possible resources of country PSO started working on the Production of bio diesel fuel from plant. The Pilot project was done of Pippling Marshal Yard at Karachi where Jhathropa plant was grown at barren land. The initial project was successful and PSO is trying to have an agreement with Baluchistan government for 30 years at 5000 acres of land near Lasbella.PSO is also working on the import of furnace oil and gasoline oil to meet the country needs. PortQasim and KPT both are importing Furnace oil and gasoline where handling capacity is poor.To utilize the capacity of handling the liquid cargo at KPT there is an MOU signed between PSO and KPT of Techno Financial Feasibility study between PAPCO and Kemari (Oil jetties). This will improve the infrastructure and optimize the possible resources.In the past PSO has introduced Green-XL diesel that reduce the black smoke drastically and less pollute environment.Moreover PSO is the first Oil Marketing Company which has introduced E-10 ethanol blended environment friendly fuel.PSO is constantly working on the improvement of quality of the lubricants that significantly impact environment and through which the harmful emission can be reduce.

For health and safety PSO has a separate HSE department which regularly observes and issue alerts via E-mail which aware employees regarding health, safety and environment.

PSO provide various initiatives to support educational programs. They award Gold medals, cash awards and scholarships for the top students in leading universities. PSO also assist in building schools in the earthquake affected areas. While with the cooperation of The Citizen Foundation 5 more schools are in Pipeline. PSO for social welfare has various signs and traffic signals installed by PSO as a part of public service program.

PSO provides financial assistance to Cardio Vascular Institute Karachi. It also provides annual donation to Marie Adelaide Leprosy center, Gawader which caters the people of Gawader,Pasni and Ormara.It aided Chippa Welfare Association for fully equipped ambulances and to increase the fleet of ambulance. Furthermore working with Dowites operation theater society for the construction of well-equipped Operation Theater Complex at civil hospital Karachi

For the women empowerment PS