S-OIL's ESG management starts from understanding the expectations of C.E.O. (Customers, Employees, Owners & other stakeholders). Going forward, the Company will create economic, environmental, and social values reflecting the expectations of C.E.O. and contribute to the development of society and the nation.

S-OIL's performance-oriented corporate culture is further reinforced and supported by its transparent and reasonable HR system. S-OIL ensures transparency and fairness in its recruitment and evaluation process and provides employees with various training programs to cultivate core resources to drive its growth forward. S-OIL also offers an array of benefit programs to employees through its advanced compensation and benefit systems to promote a healthy work & life balance.

HR Management / Fair Evaluation & Compensation

S-OIL pursues the diversity of its employees and strives to create a virtuous cycle where the Company encourages every employee to unleash their full potential, bring about innovation and contribute to the Company's growth.

Securing Talented Employees through Fair Recruitment Procedures (SDGs #5 and #8)

S-OIL strives to secure talented resources from diverse backgrounds by implementing a fair recruitment process that rules out any discriminatory factors such as gender, age, region, academic background, or disability. Specially, S-OIL pays attention to socially marginalized groups by proactively hiring the disabled and national meritorious people and creating working environments without discrimination for non-regular employees. The channels through which S-OIL reaches and attracts talented resources who also share its core values are extended to campus recruiting, internship, and scholarship support programs. S-OIL does not require potentially discriminatory information from applicants for the screening process and adopts a blind interview system in an effort to ensure that all applicants are evaluated solely on their competence and qualifications. S-OIL's transparent and fair recruitment process is a driving force for sustainable growth amid the current business environment of increasingly fierce competition.

Performance-based Evaluation and Compensation

S-OIL motivates employees and improves work efficiency through its performance-oriented corporate culture that evaluates and rewards employees fairly and objectively. The evaluation is focusing on encouragement to meaningful performance improvement through a year-round assessment of their work, instead of lining up all employees hierarchically for their performance. Also, it supports for employees to effectively foster current job performance and the capabilities required for higher positions. Under the year-round assessment that S-OIL newly introduced in 2020, employees set their performance targets and competency development targets early in the year and meet with evaluators for quarterly reviews to receive feedback for further improvement. In addition, the evaluation covers process indicators for achieving goals such as safety, compliance, and teamwork as well to enable more balanced assessment. S-OIL also operates a cloud-based new e-HR system to support a year-round assessment. To achieve procedural fairness and acceptance, the evaluation grade of an employee is determined through a grade adjustment session based on detailed individual performance data built up through the year-round assessment, not relative ranking or comparison. Evaluation results are not just used to determine compensation levels and promotions but also referenced for various other HR processes, including internal transfers, placements, training, and core talent selection.
As part of its performance-oriented organizational culture, S-OIL is shifting toward a performance-based reward and compensation program from a seniority-based one. The new performance-based pay structure where a wage increase in line with the service period for the same position was scaled down while that from promotion further expanded effectively motivates employees for higher performance. In addition, S-OIL introduced an individual merit-based system to differentiate the annual performance reward employees receive in accordance with evaluation results as a way to further encourage them to perform better at work.

Talent Cultivation

S-OIL's competency development model consists of basic competency for all employees, leadership competency for different leadership levels, and job competency for specific job positions, based on the leadership pipeline. A systematic training program is offered in accordance with employees' role level (job grade).

Operation of Effective Training System (SDGs #4)

Based on competency evaluation results, S-OIL offers not only in-house collective training but also various online training courses accessible via mobile devices so that employees can develop their competences anywhere, anytime. S-OIL allows employees to take courses outside the Company as needed to meet increasing needs for more specialized training. In the COVID-19 pandemic situation in 2020, in particular, S-OIL actively introduced non-face-to-face channels so that training can continue uninterrupted. S-OIL also operates Learning Cell, an open learning platform for employees who want to share their knowledge and experience while satisfying their own needs for learning. This program allows employees to form study groups on any topic they are interested in to meet for a small group lecture, group learning, or reading discussion. For global competency building, the Global Learning & Communication Center (GLC) provides targeted support for foreign language learning. S-OIL provides employees attending these programs with learning materials and expenses to promote their active interaction and competency development.
S-OIL has been using the Learning Management System (LMS) to increase the efficiency of training programs and thus effectively develop the competency of employees. LMS provides Dashboard where users can check training plans and history in real time, and My Classroom, a community learning space, so that employees can search and access learning materials including videos and textbooks for self-driven study. E-learning courses from the LMS are available via both PCs and mobile devices. In addition, S-OIL implemented micro learning into employee training by adopting a Smart-Learning system running on a mobile platform, significantly enhancing user convenience and enabling access anytime and anywhere. The COVID-19 brought profound changes in the business environment, and S-OIL responded by strengthening its non-face-to-face work environment and providing tablet PCs to all employees to facilitate effective capacity building in 2021. The various training systems at S-OIL not only help employees to stay on competency development programs and benefit from them but also improve operational efficiency of educational administration for the Company.
S-OIL set up the leadership pipeline that defines differentiated leadership competency required by position, and cultivates leaders who will lay the groundwork for the successful accomplishment of Vision 2030. Based on the leadership pipeline, proper training programs are given to employees before their taking on a higher position. To ensure effective leadership training, S-OIL uses the flipped learning approach where online training precedes offline training so that employees can acquire knowledge first and then find ways to apply it through discussion. S-OIL selects talented resources and sends them to leadership training offered by universities and training institutions at home and abroad. Leader groups are also provided with the regular leadership assessment and a one-to-one coaching program for continuous monitoring and feedback.
With the aim of achieving Vision 2030 and successfully implementing Digital Transformation roadmap, S-OIL is developing new training programs that help employees learn about and acquire digital transformation capabilities, including data literacy, analysis and utilization. Starting in 2021, S-OIL plans to roll out enterprise data scientist training courses to enhance the organizations' competency to analyze data and generate valuable business insight.
S-OIL runs S-OIL Academy for specialized job training. S-OIL Academy for Marketing & Sales covers service station operation, negotiation, and sales skills in a systematic manner so that sales professionals can learn from actual cases of sales activities. As for S-OIL Academy for Operations aimed at sharpening job competency of engineers and operators, S-OIL introduced the blended learning which combines online and offline job courses. In order to establish a stable operational competency for start-up and shut-down of each unit and to develop emergency response capabilities, S-OIL offers Operation Training Simulator Program. Also, an advanced program has been in place to support the reskilling and upskilling of engineers. Leadership courses are offered to field foremen as well.
S-OIL operates Engineer Cultivation Program to support the systematic training of engineers. In addition, S-OIL implemented ACT-Eng. Program jointly developed by Saudi Petroleum Services Polytechnic and IFP Training to enhance the systematic development of junior engineers. S-OIL also has in place programs such as intensive overseas training course and short-term MBA course to cultivate talented engineers with a global mindset and competency.
S-OIL looks to strengthen the global communication skills of employees in order to propel the global expansion of the Company. By operating the GLC at the Head Office in Seoul and the Refinery in Ulsan, S-OIL offers training courses on foreign languages used at work, including English, Chinese, Japanese and Arabic, and also courses to facilitate communication with overseas business partners, such as global cultures, business etiquette and speech training. In particular, the GLC operates effective programs catering to specific needs based on employees' roles, such as team leaders, new employees, engineers, core talents, and candidates to be dispatched to overseas offices. The GLC also takes various approaches to training, including group training and one-on-one courses, to make training more effective and convenient from the users' perspective. In addition, S-OIL Toastmasters Club was established and employees from various organizations and functions interact with one another to enhance their leadership skill and English public speaking skills.

Nurturing Next-generation Leaders

With a firm belief that cultivating core talents will drive the Company's future success, S-OIL runs a systematic Potential Future Leader Program to nurture the next generation leaders. S-OIL makes sure to select talented employees with great potential through a rigorous selection process including leadership assessment. Potential future leaders conduct leadership development activities and job expertise development activities according to the leadership development plan. Continuous mentoring and monitoring are also provided for a more systematic implementation of the program. They accumulate diverse work experiences through cross-functional job rotation. S-OIL also supports them in pursuing MBA studies at home or abroad, and a master's degree in science and engineering at IFP School in France to build a pool of leaders with global business competency. Through this systematic approach to talent cultivation, S-OIL grows potential future leaders who will lead its sustainable growth.
In addition, S-OIL operates Specialist Program to secure and develop highly specialized resources that are critical to maintaining the Company's competitiveness. S-OIL determines the target jobs based on substitutability, developmental characteristics, and business impact, and select potential specialists through a rigorous selection process every year. After being selected, potential specialists are trained to become experts in their respective fields through systematic and high-quality professional development programs such as obtaining professional certificates and training at domestic or foreign specialized institutions in accordance with the expertise development plan. They are then vetted and assessed again by a group of expertise evaluators to select the Specialists. Through this systematic cultivation, potential specialists will grow into the core resources who will drive S-OIL's competitiveness.

Corporate Culture / Labor-Management Relations

S-OIL has established a productive and healthy corporate culture based on vibrant internal communication. S-OIL operates leading benefit programs that reflect employees' needs and makes continued efforts to promote the physical and mental well-being of employees. S-OIL strives to provide employees with the best work environment to assure higher work efficiency. Furthermore, S-OIL is committed to laying the groundwork for sustainable growth by maintaining a harmonious labor-management relationship.

Internalization of Core Values

At S-OIL, all officers and employees are taking on responsibilities and realizing their full potential to the fullest in order to achieve Vision 2030, based on the core values that are common values that guide their decision and action under all circumstances. S-OIL is concentrating efforts to raising awareness of employees on its core values and applying them to business and decision-making processes. Furthermore, these core values are reflected in the recruitment process and competency evaluation criteria for office workers. S-OIL also recognizes employees who live up to the core values and continues efforts to hire and cultivate talents who share its core values. S-OIL produces the CEO messages and video clips on cases that demonstrate the core values, and shares them across the organization as training materials. S-OIL is committed to maximizing business ethics and core values by continuously internalizing them through programs such as core value workshops.
S-OIL promotes collaboration and communication as a way to break down the silo among individuals and teams and create a productive and healthy corporate culture. The Company-wide business explanation session is held twice a year, where the top management presents business performance, outlook, and critical issues, and all participants ask questions freely during a Q&A session. With the aim of expanding communication and teamwork, both vertically between leaders and their members and horizontally among individuals or organizations, S-OIL encourages diverse team building activities and programs such as Junior Board, communication sessions for new employees, Dynamic Rookies program, and communication promotion program. In parallel, S-OIL has a designated grievance support office and ombudsperson at each worksite so as to handle an employee's work-related grievances or complaints most rationally.
In addition, S-OIL conducts an engagement survey to quantify employees' satisfaction and overall attitude at work and use the results as baseline data for improving corporate culture and performance. Going forward, S-OIL will continue to improve its systems and programs by regular diagnosis on employee engagement, and strengthen communication within the organization for greater employee satisfaction.

Industry-leading Employee Benefit Programs (SDGs #3)

To create a workplace where employees can feel deeply engaged in their work based on financial stability, S-OIL offers top-tier welfare benefit programs. In addition to the basic benefits package including four major public insurances and the congratulations & condolences support fund, S-OIL offers specialized welfare benefit programs tailored to the human life cycle to ensure that employees can fully engage in work as well as satisfy themselves in terms of housing, health, children's education, and leisure activities.
In preparation of the social phenomenon of aging populations, S-OIL pays full attention to ensuring a stable life for employees after retirement so as that they focus their capabilities on their work without having to worry about post-retirement life. In this regard, in 2015, S-OIL introduced the New Pension program, a matching grant scheme where the Company pitches in for employees' post-retirement resources. Currently, 99% of all employees have subscribed to the program. The program is designed in a way that employees can develop interest in S-OIL's growth in the mid- to long-term by accumulating pension funding commensurate with the mid- to long-term performance of the Company.
To help employees fully engage themselves at work and home with peace of mind, S-OIL established daycare centers at its Head Office and Refinery. Operation of the daycare center has significantly boosted the satisfaction of employees amid the shortage of public centers and widespread mistrust on private centers. It has helped alleviate the employees' burden of childcare and contributed to promoting work and family balance. In particular, the daycare center provides comprehensive educational programs that meet the interest and demand of children and maintains close communication between parents, the institute, and the Company.
S-OIL operates health clinics at the Head Office and Refinery manned by nurses at all times to swiftly respond to emergencies during work hours as well as promote employees' health at normal times. S-OIL operates nursery rooms and provides ergonomic office furniture for expectant mothers. S-OIL also provides medical checkups through high-quality medical institutions every year and supports recovery from illness through medical expense allowances and sick leave benefits. S-OIL runs fitness centers at the Head Office and Refinery and conducts health campaigns periodically. Mental stability as well as physical health is critical for full employee engagement. To that end, S-OIL runs the Employee Assistance Program, a comprehensive counseling service where outside professionals provide tips on job-triggered stress, interpersonal relations at work, family relations, childcare and more.

Promotion of Work & Life Balance (SDGs #3)

Guided by a belief that employees who strike a balance between work and life can focus more on their work with creativity and passion, S-OIL continuously reviews and makes changes to its policies beyond the social expectations and legal requirements to ensure employees can relax and have quality family time away from work. As part of this, S-OIL runs various programs such as the two-week intensive holiday, summer vacation, off-duty day, and monthly refreshment day (MRD), encouraging employees to utilize at least 28 days from their annual leave quota. S-OIL provides resort facilities across the country for employees to relax from their routine life at work. Furthermore, employees can check in at hotels and resorts in popular tourist destinations at low cost in summer and winter, more than 50% of employees visit those facilities every year.
S-OIL started the PC-off campaign across the board to encourage employees to leave on time where possible, take breaks, and get a healthy work and life balance, which is a key to employees' focus, energy, and productivity at work. In 2020, S-OIL improved the electronic approval system and in turn work efficiency as a result of the shortened approval lead time, and adopted an autonomous dress code to promote creative and flexible thinking among employees in tandem with the social trend. In addition, S-OIL established Leaders' Way of Working and implemented the scheme through various channels so that leaders can increase work efficiency. Efforts for greater work efficiency are also being made at all levels, bringing work diet and positive changes to the way of working through lectures and workshops on work efficiency improvement. S-OIL will continue to improve work efficiency through streamlining existing processes.

Best-in-Class Work Environment (SDGs #3)

S-OIL strives to provide employees with the best-in-class work environment by optimizing workspaces, maintaining a pleasant workplace, and serving swift business support. S-OIL runs a Creative Lounge in the Head Office for self-development and relaxation and various other spaces dedicated to supporting external projects, while enhancing business efficiency. S-OIL's efforts to provide employees a safe and pleasant work environment include thoroughly managing an air purification system as well as replacing upgrading office lights to LED, replacing AV/VC equipment in conference rooms, and providing comfortable office furniture for disabled and pregnant employees. Moreover, the main auditorium at the Head Office is offered to employees for a wedding event of themselves or their children.

Harmonious Labor-Management Relations

S-OIL's labor-management relationship sets an exemplary precedent for the industry as there has been no single labor dispute for the past 41 years since establishment of the labor union in 1980. This was possible based on mutual trust and cooperation between the labor union and the Company. The management respects union activities and takes heed of the labor union's voices while complying with relevant laws and regulations. The labor and management work together to lift corporate competitiveness, improve the quality of employees' lives, and fulfill corporate social responsibility through a variety of communication channels including the Labor-Management Council, the Industrial Safety & Health Committee, and joint workshops as well as salary negotiations and collective bargaining. The content of labor-management negotiations is disclosed to all employees immediately.

Industrial Safety & Health Management

Based on top management's commitment to safety and the newly implemented safety enhancement plan, S-OIL strives to create world-best safety culture and zero accident workplaces. To this end, S-OIL takes various measures such as providing safety training to employees and contractors and supporting contractors in improving their safety standards. In parallel, S-OIL periodically carries out drills to minimize damage on the Company and the local community in the face of unpredictable emergencies such as earthquake, fire, explosion and leakage.

World-best Safety Culture

S-OIL is engaged in a variety of activities to enhance its safety culture, such as by enforcing safety measures for everyone accessing its premises, including employees, contractor workers, and visitors, and operating an IT-based management system in accordance with its new strict SHE standards and safety enhancement plan. S-OIL holds the Company-wide Safety Management Committee, Safety Town Hall meetings & SHE Committee, and carries out field walkthroughs regularly to devise safety policies and support safety inspection for the Head Office, Refinery and terminals, and to strengthen its safety capacity through active communication and sharing of accident cases. S-OIL also conducts safety audits such as PSM self-audit, work permit audit, and fire protection audit to ensure full compliance with strengthened safety laws and further enhance its safety level through continuous review and feedback. In addition, safety training by different positions and job functions is provided to reinforce employees' safety capabilities and awareness. More recently, S-OIL introduced the Case Analysis & Risk Elimination (CARE) Program to share with all employees essential operating experiences, including near misses and emergency actions, and continuously conducts accident prevention activities such as distributing safety videos and safety training materials. Thanks to such proactive efforts for workplace safety and industrial accident prevention, S-OIL has maintained a world class level of safety culture scores since 2017, and achieved 10 million zero-accident man-hours for the first time in its history in 2021.

Continuous Reinforcement of Safety Management System

To promote effective safety management, S-OIL continuously improves its safety management system and eliminates the root causes of accidents through the Behavior-Based Safety (BBS) program that identifies and addresses unsafe behaviors or conditions. S-OIL keeps track of the safety indicators for employees and contractors in real time, and improves performance and operational deficiencies through workshops and consulting services. S-OIL prevents an accident by detecting an abnormal sign through near misses and BBS program. As there is a strong correlation between near misses and major accidents, S-OIL classifies near miss cases depending on severity, and focuses on those cases that can be directly linked to serious accidents. S-OIL also continuously identifies near misses and shares cases between employees aiming to remove potential risks in advance. Daily safety checks, joint safety walkthroughs with senior leadership, and safety dialogues led by safety managers are carried out on a periodical basis, and the results are updated on the SHE dashboard for trending and monitoring. In addition, S-OIL carried out regular risk assessments with external experts that fall under the scope of the assessment cycle in accordance with the Industrial Safety & Health Act and internal regulations.

Reinforcement of Emergency Response Capability

Recognizing the importance of initial response in preventing an accident from escalating into a major disaster, S-OIL operates the Emergency Control Program (ECP), an enterprise risk management system. In case of an accident, the Emergency Control Center (ECC) is activated both at the Head Office and the site according to the ECP. The ECC calls emergency meetings, shares the location of the accident via a video conference system, and orchestrates the response activities to keep the situation under control. On the site, the command transmits the status to the ECC in real time, allowing the ECC to make immediate decisions based on the live feed and remotely control the site. Furthermore, S-OIL strives to build the enterprise emergency response capability so as to effectively handle large-scale disasters, such as fire, power outage, oil spill, earthquake, and tsunami. To this end, simulated emergency response drills are planned for and carried out more than 24 times each year, at both enterprise and business site levels. In addition, all employees are trained in basic firefighting equipment and cardiopulmonary resuscitation. To improve the initial response capability of its own fire brigade and joint response capabilities with external related agencies, S-OIL regularly conducts emergency mobilization drills and fire scenario exercises as well. In 2020, S-OIL conducted company-wide emergency response drills for a scenario of a fire started by combustible material leakage in a plant area. As such, S-OIL is striving to prevent accidents and minimize damage to personnel, the environment, and property from accidents.

Employee Health Management

S-OIL is engaged in various activities to protect and promote the health of its employees. Medical checkups are provided regularly to all employees. Particularly, comprehensive checkups are done for those over 35 years of age. In addition to the general tests provided, additional examination items including adult diseases and cancer are covered by S-OIL. Furthermore, S-OIL prevents and manages occupational diseases through health diagnosis, work environment assessment, asbestos control, and periodical risk assessment under the Occupational Safety and Health Act. S-OIL also supports employees who have certain medical conditions or need monitoring with periodic counselling and tests, and treatment for their speedy recovery. S-OIL conducts an employee health campaign, in which glucose and ion drinks are distributed to prevent heat stress and heat-related illness in summer, and flu vaccination is offered during the winter season. S-OIL has established a step-by-step contingency plan to prevent the spread of infectious diseases such as COVID-19 and allow for systematic and rapid response when a potentially infectious case is identified. S-OIL also encourages employees and contractors to adhere to COVID-19 guidelines such as checking temperature, wearing a mask, washing hands, and sanitizing surroundings. Medical services are also available at the in-house health care center, where employees can get basic medical supplies and health counseling, as well as professional psychological counseling sessions for employees and their families. In addition, various services designed to promote employee health are provided, such as anti-smoking program, obesity management program, and noise induced hearing loss prevention campaign.

Support for Safety Management of Contractors

S-OIL engages in various supporting activities to strengthen its contractors' safety management capabilities. S-OIL launched the contractor safety and health cooperation program with its contractors even before the increasingly stringent regulations came into force. Also, S-OIL collects opinions from contractors through an annual survey. In 2020, a total of 42 contractors participated in this program to work safely for the shared goal of maintaining a zero accident workplace. S-OIL conducts various safety management activities such as regular safety meetings, safety checks, and safety campaigns, and provides diverse safety education for contractors, including safety leadership lectures, supervisor workshops, and risk assessment training. S-OIL provides consulting support for contractors to obtain the Occupational Safety & Health Management System (KOSHA 18001) certification and KRAS Risk Assessment certification to enable contractors to achieve a high level of safety management capabilities, and as of 2020, 37 contractors have obtained KOSHA 18001 certification. Since 2018, S-OIL has supported contractors that are willing to launch a zero accident campaign at their worksite, and awarded them a certificate of achievement of their zero accident safety goals, striving to create a global top-tier safety culture in the workplace. In addition, S-OIL seeks to improve the quality of safety management by strengthening the qualification process for contractor safety personnel and allowing only qualified ones to perform the work. Safety managers, supervisors, heavy equipment signalmen, and traffic signalmen must take training provided by S-OIL and score at least 80 points to be qualified, and then renew their qualification every two years through retraining. In parallel, S-OIL performs comprehensive contractor assessments to look at safety, environment, and sustainability related aspects as well as basic performance indicators, and then grants bidding opportunities to only those meeting the criteria. S-OIL also grants a certification to contractors who demonstrate exemplary safety management practice, in its effort to increase the sustainability of its contractors.

Support for Health Management of Contractors

As an extension of health management efforts, S-OIL performs joint safety and health inspections with its contractors and offer health guidance. S-OIL also assesses work environments, monitors if health examinations are provided appropriately, and provides health management counseling, in a bid to promote the health of contractors' employees. S-OIL also extends certain health promotion services available to its employees to its contractors, including access to health care centers, medical supplies, first aid, and emergency medical treatment for injuries.
S-OIL Safety, Health and Environment Commitment Statement
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