SOCIAL ANDENVIRONMENTAL REPORT

SOCIAL AND ENVIRONMENTAL REPORT 2007 // WWW.PETROBRAS.COM

SELOPRÓ-EQÜIDADEDE GÊNERO 2007

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PROFILEPetrobras is a publicly listed company that operates on Petrobras is a publicly listed company that operates on an integrated basis in the following segments of the oil, an integrated basis in the following segments of the oil,

gas and power sector: exploration and production, gas and power sector: exploration and production, refi ning, commercialization, transportation, refi ning, commercialization, transportation,

petrochemicals, distribution of oil products, natural gas, petrochemicals, distribution of oil products, natural gas, biofuels and electricity. Founded in 1953, Petrobras is now biofuels and electricity. Founded in 1953, Petrobras is now

the world’s sixth largest oil company, by market value, the world’s sixth largest oil company, by market value, according to the consulting fi rm PFC Energy. Leader in according to the consulting fi rm PFC Energy. Leader in

the Brazilian oil sector, Petrobras has been expanding its the Brazilian oil sector, Petrobras has been expanding its operations, in order to become one of the world’s top fi ve operations, in order to become one of the world’s top fi ve

integrated energy companies by 2020.integrated energy companies by 2020.

VISION FOR 2020 Petrobras will be one of Petrobras will be one of

the five largest integrated the five largest integrated

energy companies in energy companies in

the world and the brand the world and the brand

of choice among our of choice among our

stakeholders.stakeholders.

VISION ATTRIBUTES Our activities will be notable for:Our activities will be notable for:

> > A strong international presenceA strong international presence

> Setting a > Setting a worldwide worldwide benchmark in biofuelsbenchmark in biofuels

> > Excellence in our operations, Excellence in our operations, management, human management, human

resources and technology resources and technology

> > ProfitabilityProfitability

> Setting a > Setting a benchmark in benchmark in social and environmental social and environmental

responsibilityresponsibility

> > Commitment to sustainable Commitment to sustainable developmentdevelopment

MISSIONTo operate in a safe and profitable To operate in a safe and profitable

manner in the energy sector in manner in the energy sector in

Brazil and abroad, showing social Brazil and abroad, showing social

and environmental responsibility and environmental responsibility

and providing products and services and providing products and services

that meet clients’ needs and that that meet clients’ needs and that

contribute to the development of contribute to the development of

Brazil and the other countries in Brazil and the other countries in

which the company operates.which the company operates.

Goal 5 Goal 5

Improve maternal health Improve maternal health

Goal 6 Goal 6

Combat HIV/AIDS, malaria Combat HIV/AIDS, malaria

and other diseases and other diseases

Goal 7 Goal 7

Ensure environmental Ensure environmental

sustainabilitysustainability

Goal 8 Goal 8

Establish a global partnership Establish a global partnership

for development for development

MILLENNIUM GOALS Goal 1 Goal 1

Eradicate extreme Eradicate extreme

poverty and hunger poverty and hunger

Goal 2 Goal 2

Achieve universal Achieve universal

primary education primary education

Goal 3 Goal 3

Promote gender equality Promote gender equality

and empower women and empower women

Goal 4 Goal 4

Reduce child mortality Reduce child mortality

MILLENNIUM DEVELOPMENT GOALSThere are eight United Nations Millennium Development Goals There are eight United Nations Millennium Development Goals (MDG) presented in the Millennium Declaration to prioritize the (MDG) presented in the Millennium Declaration to prioritize the resolution of key challenges for development. The countries resolution of key challenges for development. The countries should achieve the goals by 2015. Petrobras supports the MDG should achieve the goals by 2015. Petrobras supports the MDG and encourages other companies and institutions to put them and encourages other companies and institutions to put them in practice. In 2007, the Company sponsored the MDG Brazil in practice. In 2007, the Company sponsored the MDG Brazil Prize created by Brazilian government to encourage, valorize Prize created by Brazilian government to encourage, valorize and give further visibility to good practices that contribute to and give further visibility to good practices that contribute to achieving the goals.achieving the goals.

Contents

Message from the CEO Message from the CEO 0202

PetrobrasPetrobras 0505 Integrate role at home and abroad Integrate role at home and abroad 0606 Rise in production, revenue and shares Rise in production, revenue and shares 10

Social and Environmental Social and Environmental Responsibility Responsibility 14 Management challenges in Social Responsibility Management challenges in Social Responsibility 16 Report as a management tool Report as a management tool 20

Human RightsHuman Rights 23 Principle Principle 1 — 1 — Businesses should support and Businesses should support and respect the protection of internationally respect the protection of internationally proclaimed human rights proclaimed human rights 24 Impact on communities Impact on communities 24 Cultural, social and sports investments Cultural, social and sports investments 28 Principle 2 — Principle 2 — Businesses should make sure Businesses should make sure that they are not complicit in human that they are not complicit in human rights abuses rights abuses 37 Relationship with suppliers Relationship with suppliers 37 Human Rights Case Human Rights Case 4040

LaborLabor 43 Workforce Workforce 44 Health, Safety and Quality of Life Health, Safety and Quality of Life 46 Remuneration and benefi ts Remuneration and benefi ts 50 Principle Principle 3 — 3 — Businesses should uphold the Businesses should uphold the freedom of association and the eff ective freedom of association and the eff ective recognition of the right to collective bargaining recognition of the right to collective bargaining 54 Freedom of association Freedom of association 54 Principle Principle 4 — 4 — Businesses should uphold the Businesses should uphold the elimination of all forms of forced and elimination of all forms of forced and compulsory labor compulsory labor 56 Rejection of forced labor Rejection of forced labor 56 Principle 5 —Principle 5 — Businesses should uphold the Businesses should uphold the eff ective abolition of child labor eff ective abolition of child labor 58 Guarantee of the rights of the child and adolescent Guarantee of the rights of the child and adolescent 58 Principle Principle 6 — 6 — Businesses should uphold the Businesses should uphold the elimination of discrimination in respect of elimination of discrimination in respect of employment and occupation employment and occupation 60 Against prejudice and discrimination Against prejudice and discrimination 60 Labor Case Labor Case 64

EnvironmentEnvironment 67 Principle 7 —Principle 7 — Businesses should support Businesses should support a precautionary approach to a precautionary approach to environmental challenges environmental challenges 68 Role in Health, Safety and Environment Role in Health, Safety and Environment 68 Climate change Climate change 71 Mapping, monitoring and reducing impacts Mapping, monitoring and reducing impacts 73 Principle 8 —Principle 8 — Businesses should undertake Businesses should undertake initiatives to promote greater initiatives to promote greater environmental responsibility environmental responsibility 75 Consumption of energy, material Consumption of energy, material and natural resources and natural resources 75 Emissions, effl uents and waste Emissions, effl uents and waste 78 Ecosystems and biodiversity Ecosystems and biodiversity 81 Products, compliance and transportation Products, compliance and transportation 85 Energy conservation and Energy conservation and conscious consumption conscious consumption 87 Principle Principle 9 — 9 — Businesses should encourage Businesses should encourage the development and diff usion of the development and diff usion of environmentally friendly technologies environmentally friendly technologies 88 Renewable energies Renewable energies 88 Environment CaseEnvironment Case 90

TransparencyTransparency 93 Relationship with stakeholders Relationship with stakeholders 94 Products and Services Products and Services 98 Principle 10 —Principle 10 — Businesses should work Businesses should work against corruption in all its forms against corruption in all its forms 10100 Anti-corruption and anti-bribery policies Anti-corruption and anti-bribery policies 10100 Transparency Case Transparency Case 10103

Appendices Appendices 10104 Prizes Prizes 10108 Materiality Materiality 10109 Indicator Matrix Indicator Matrix 11110

That same year when the Company’s social responsibility policy was established,

the topic was added to the corporate functions in the revision of the 2020

Strategic Plan. The Petrobras challenge is now to become an international

benchmark in social responsibility for business management, contributing to

sustainable development. JOSÉ SERGIO GABRIELLI DE AZEVEDO, Petrobras CEO

2

Message from the CEO

MESSAGE FROM THE CEO

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 3

The year 2007 was a landmark for Petrobras. It was

considered to be the world’s sixth largest oil major and

a highlight of its operations was the major petroleum

discoveries in Brazil. The Tupi agglomeration alone

has a potential to signifi cantly increase the levels of

current Brazilian reserves.

Petrobras acknowledges and assumes its prime

responsibility for the environment. For this reason

it invested two billion reais in the environmental

aspects of its operations and external sponsorship

projects. The Company strives for eco-effi ciency and

is constantly developing groundbreaking solutions to

minimize the waste of resources and impacts of its

operations. Another highlight is the increasing biofuel

investments. Petrobras is in the international fore-

front of companies with potential to operate in this

segment and to contribute to mitigating the eff ects

of global warming.

Preserving the Amazon rainforest is a strategic

priority for the Company. The Petrobras Center of

Environmental Excellence in the Amazon, launched

in 2007, combines technology and scientifi c know-

how for the region’s sustainable development and

to prevent and reduce risks caused by the industry’s

intervention.

That same year when the Company’s social

responsibility policy was established, the topic was

added to the corporate functions in the revision of

the 2020 Strategic Plan. The Petrobras challenge is

now to become an international benchmark in social

responsibility for business management, contributing

to sustainable development. Another 2007 highlight

was the renewal of the Company’s participation in the

Dow Jones Sustainability Index and São Paulo Stock

Exchange (Bovespa) Business Responsibility Index,

both benchmarks for investors looking for socially

responsible businesses.

In 2007, Petrobras invested R$ 585.8 million

in cultural, environmental, social and sports proj-

ects. The aim of the new Petrobras Citizenship and

Development social program that started in 2007

is to invest R$ 1.3 billion by 2012 in projects that

contribute to reducing poverty and social inequal-

ity in Brazil.

The program’s lines of action are to generate

income and job opportunities, professional training

education and guaranteeing the rights of the child

and adolescent. A set of performance targets and

indicators make it possible to monitor the strategic

actions of the Petrobras Citizen and Development

program and evaluate its results. Annual public selec-

tion processes also seek to assure transparency of new

incoming supported projects and make access to the

Company investments more democratic.

Petrobras agrees to align its management with

the ten principles of the UN Global Compact, to

which it is a signatory since 2003. This report also

informs about the Company’s progress in fulfi lling

these objectives.

We hope that this Social and Environmental

Report achieves its objective: to inform Petrobras

stakeholders about our main actions, impacts, risks

and opportunities in the economic, environmental

and social areas.

Good reading!

José Sergio Gabrielli de Azevedo

Petrobras CEO

The year

consi

a high

disco

has a

PETROBRAS4

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The market value of Petrobras, which operates in 27 countries, was The market value of Petrobras, which operates in 27 countries, was R$ 429.9 billion in 2007, 86.6% up from the previous year. Growth in R$ 429.9 billion in 2007, 86.6% up from the previous year. Growth in dollars was 125.2%, equal to US$ 242.7 billion. Company investmentsdollars was 125.2%, equal to US$ 242.7 billion. Company investmentswere R$ 45.3 billion, the highest annual figure ever for the Company.were R$ 45.3 billion, the highest annual figure ever for the Company.

Some of the year’s highlights are the discovery of a recoverable Some of the year’s highlights are the discovery of a recoverable volume of five to eight billion barrels of light oil and natural gas in volume of five to eight billion barrels of light oil and natural gas in the Tupi area in Santos Basin; announcement of the Petrobras 2020 the Tupi area in Santos Basin; announcement of the Petrobras 2020 Strategic Plan and 2008-2012 Business Plan; purchase of Suzano Strategic Plan and 2008-2012 Business Plan; purchase of Suzano Petroquímica and takeover of the Ipiranga Group business in Petroquímica and takeover of the Ipiranga Group business in association with Braskem and the Ultra Group.association with Braskem and the Ultra Group.

Petrobras

PETROBRAS6

PROFILE

Integrate role at home and abroad

ACTIVITIES AND MARKETS

Petrobras operates on an integrated basis at home

and abroad, with business strategies focusing on

exploration and production (E&P); downstream

(refining, transportation and trade); petrochemi-

cals; distribution; gas & power; and biofuels. It is

a Brazilian public listed company incorporated as

a joint stock business corporation linked to the

Brazilian government’s Ministry of Mines and Energy.

The Company’s economic activities are freely com-

petitive with other companies depending on market

conditions. Petrobras is regulated by the Corporation

Act (Law no. 6404 dated December 15, 1976) and the

Company bylaws.

The Petrobras System consists of Petróleo

Brasileiro S.A. (Petrobras holding) and its subsidiar-

ies, affi liates, joint affi liates and specifi c purpose com-

panies. Its subsidiaries include Petrobras Química

S.A. (Petroquisa), Petrobras Distribuidora S.A.

(Petrobras Distribuidora) and Petrobras Transporte

S.A. (Transpetro).

Petrobra

and abro

explorat

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The trade of its products include on the Brazilian

market the sale of byproducts in diesel, gasoline, fuel

oil, naphtha, LPG (liquefi ed petroleum gas), jet fuel

(aviation kerosene) and others. Various markets world-

wide are supplied by the Company. Product purchase

and sale operations outside Brazil are up 49% against

2006, reaching 559,000 barrels per day (bpd). Some

highlights are the increase in gasoline sales in the USA

and petroleum in Colombia, plus the start of bunker

sales with low sulfur content in Europe.

The subsidiary Petrobras Distribuidora oper-

ates throughout Brazil, with around 6,000 service

stations and 740 BR Mania convenience stores.

This network includes the resale of fuels and other

products, such as lubes, in addition to services. The

Company also sells considerably larger volumes of

fuels, lubes, special products, asphalt, emulsions

and energy to major consumers, such as industrial

plants, governments, haulage companies and ther-

moelectricity plants.

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CORPORATE GOVERNANCE

The corporate governance structure is based on the

Board of Directors, Fiscal Committee, Executive

Board, Administration Advisory Committees, Business

Committees and Management Committees. The board

of directors consists of nine members elected by the

General Shareholders’ Meeting, responsible for guid-

ance and senior management of the Company. The

board of directors sets the general business direction of

the Company, defi ning mission, strategic objectives and

guidelines, in addition to approving the Strategic Plan.

The executive board consists of the CEO and six direc-

tors elected by the board of directors and is responsible

for the Company’s business management.

Since 1999, the chair of the board of directors is

occupied by a member with no executive duties or

any other ties to Petrobras. Only one member of the

board has executive powers – the CEO of Petrobras.

Of the nine directors he is the only one that does not

conform to independence requirements. The direc-

tors are elected by the General Shareholders’ Meeting

without infl uence of the Executive Board. The corpo-

rate governance guidelines provide that the board of

directors each year assess its performance and the

role of the CEO and Petrobras executive directors.

These assessment mechanisms are in the process of

being implemented.

The corporate governance guidelines also include

the skills and experience expected of the directors,

that must meet the requirements of personal integrity,

no confl icts of interest, time availability, motivation,

affinity with Company values, and familiarity with

the best corporate governance practices. Moreover,

experience as a top executive is valorized, in addition

to knowledge of finance, accounting, energy sector,

Petrobras 2020 Strategic Plan

The Petrobras 2020 Strategic Plan and 2008-2012 Business Plan were announced in August. The Strategic Plan

has two structural changes. The first is the division by business segment, and no longer by business area. Petro-

bras now focuses its attention on six business segments: Exploration & Production (E&P), Downstream (Refining,

Transportation and Trade), Petrochemicals, Distribution, Gas & Power and Biofuels. The second refers to new

management challenges, with focus on capital discipline, human resources, social responsibility, climate change

and technology.

The Business Plan foresees for 2012 an oil and natural gas production of 3,494,000 barrels of oil equivalent per

day (boed), of which 3,058,000 boed will be produced in Brazil. Investments are also expected of US$ 112.4 billion

in the 2008-2012 period with 87% in Brazil and 13% elsewhere.

At the end of 2007, the Company’s market value was

429.9 billion reais, or 86.6% more than in 2006

national and international markets and strategies. In

order to assure that confl icts of interest are prevented,

the Good Practices Code addresses Petrobras in-com-

pany policies, such as the information dissemination

policy on a relevant act or fact, and the securities nego-

tiation policy, for example. These policies address

issues relating to the use of privileged information

and conduct of the administrators and senior manage-

ment in Petrobras.

The Fiscal Committee of a permanent nature

consists of fi ve members, also elected by the General

Shareholders’ Meeting and is responsible for supervis-

ing the administrators’ acts and examining fi nancial

statements, for example.

The purpose of the board of director committees,

consisting of three members from the Board, is to help

the Committee by analyzing and recommending spe-

cifi c matters. The Business Committee, consisting of

members of the Executive Board and other Company

executives, examines and issues an opinion on relevant

corporate topics, and which involve more than one

business area. The Management committees consist of

the Company’s executive managers and act as discus-

sion forums on specifi c topics, whose results are later

taken to the Business Committee. Today Petrobras

has 12 management committees: Supply; Exploration

& Production; Gas & Power; Organization Analysis

and Management; Internal Controls; Marketing and

Brands; Human Resources; Social Responsibility;

Risks; Health, Safety and Environment; Information

Technology; and Petrobras Technology.

Under its corporate bylaws, Petrobras activi-

ties obey the Basic Organization Plan, approved by

the board of directors, which contains the general

PETROBRAS8

PROFILE

structure and defi nes the nature and attributes of

each body and subordination, coordination and

control relations for it to operate.

The current organizational model of Petrobras

consists of the Corporate, Finance & Service areas

and by four Business Areas (Supply, Exploration &

Production, Gas & Power and Worldwide). Each

of them is accountable to its contact director, in

addition to the Corporate area that is accountable

to the CEO.

PETROBRAS TRADEMARK

Petrobras System brand management, directly linked

to business development and protection and in line

with the Company’s worldwide expansion, admin-

istrated in 2007 a total of 4,367 registrations of this

intangible asset, with investments in sponsorships,

advertising, international communication, strategy,

development and protection of the corporate image

and brands. According to the ranking published in

2006 by the consulting fi rm Brand Analytics, based on

public data, the institutional trademark was worth US$

1.012 billion, a 37% increase over the previous year.

Some of the key Company products are: Podium

gasoline, Podium diesel, Verana diesel, Biodiesel, BR

Aviation, Lubrax lubes and waxes, Lubrax Aviation

and Evolua polish wax. Some of the main ser-

vices provided are convenience stores (BR Mania

and Spacio 1); car wash system in service stations

(Lavamania and Acuocenter); quality programs (De

Olho no Combustível – keeping an eye on the fuel - and

Calidad Controlada Petrobras); lubrication center in

service stations (Lubrax Center); fuel credit card

(Petrobras Card); fl eet automation system (Petrobras

Flota); loyalty (Petrobras Premmia) and relation-

ship programs; and cultivating commercial clients

and partners (360° Petrobras, On the Right Road,

Truck Driver (Siga Bem Caminhoneiro) and Friendly

Mechanic (Amigo Mecânico).

P-50 platform in

Albacora Leste,

Campos Basin

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 9

The Petrobras organization model, approved by the Board of Directors in October 2000, is constantly being refined. Changes in the

Company’s organizational structure in 2007 led to the adoption of a new organizational and administrative model in certain units. Examples

of this are the broadened scope of operations in the Exploration & Production business unit in the Solimões Basin, the creation of temporary

organizational structures for the implementation of large-scale undertakings, and the transferring of telecommunications activities to the

Services area. Approval was granted for the structural reorganization of business units abroad, linked to the International business area.

Petrobras Organizational Structure

Corporate Finance

Financial Planning & Risk Management

Finance

Accounting

Taxation

Investor Relations

Financial Area

Ombudsman Internal Auditing

CEO’s Off ice

General Secretary

EXECUTIVE BOARD

CEO

FISCAL

COUNCILBOARD OF

DIRECTORS

New Business

Human Resources

Legal Area

Management Systems Development

Institutional Communication

Business Strategy & Performance

Health, Safety & the Environment

Materials

Research & Development (Cenpes)

Engineering

Information Technology & Tele-communications

Shared Services

Services

Corporate Area

Business Technical Support

Business Development

Southern Cone Region

Americas, Africa & Eurasia

International Area

Corporate Section

Logistics

Refining

Petrochemicals & Fertilizers

Marketing & Sales

Downstream

Corporate Section

Production Engineering

Services

Exploration

North–Northeast

South–Southeast

Exploration & Production (Upstream)

Corporate Section

Natural Gas Logistics & Equity Stakes

Energy Operations & Equity Stakes

Energy Development

Marketing & Sales

Gas & Power

PETROBRAS10

PERFORMANCE IN 2007

OPERATIONS HIGHLIGHTS

Petrobras operates in 27 countries: Angola, Argentina,

Bolivia, Brazil, Chile, China, Colombia, Ecuador,

England India, Iran, Japan, Libya, Mexico, Mozambique,

Nigeria, Pakistan, Paraguay, Peru, Portugal, Senegal,

Singapore, Tanzania, Turkey, Uruguay, USA and

Venezuela. Exploration and production are carried

out in 20 countries.

At the end of 2007, the Company’s market value

was R$ 429.9 billion, 86.6% more than in 2006. In

dollars, its market value reached the US$ 242.7 bil-

lion mark, which is a growth of 125.2% compared to

the previous year. According to consulting fi rm PFC

Energy, it ranks as the sixth largest oil major in the

world based on market value. The Petrobras fi nancial

and operational results, the rise in international prices

of a barrel of petroleum and the major oil discover-

ies were decisive factors in the performance of the

Company shares in 2007.

The net operating income was R$ 170.6 billion,

8% more than in 2006, the result of the improved

Petrobra

Bolivia, B

England I

N

S

Rise in production,

revenue and shares

sales performance on the home and foreign markets.

Net income was R$ 21.5 billion, 17% lower than in

2006 because of factors such as the valorization of the

real, import costs for petroleum and byproducts, and

extraordinary expenses with personnel with regard to

the new pension plan agreement. The operating cash

generating capacity (EBITDA) continued stable in

relation to the year before.

Consolidated investments rose 34% compared

to those in 2006, and reached the record figure of

R$ 45.3 billion. The exploration and production

segment received 47% - the largest share of direct

investments.

In November, Petrobras announced the discovery

of a major oil-bearing area in Brazil, stretching from

the Espirito Santo, Campos to Santos basins. The

discovered volume in the Tupi accumulation alone,

part of this new frontier, has potential to increase the

country’s current reserves by 50%.

Another milestone was the start of deepwater

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 11

production in Northeast Brazil in the Piranema fi eld

off the coast of Sergipe. The processed oil is consid-

ered the lightest ever found in deepwater in Brazil and

essential for lube production.

In 2007 the total volume of 2.301 million boed of

oil and natural gas produced is almost the same level

as the previous year. In Brazil, 2.065 million boed was

produced and 236,000 boed outside Brazil, including

1.918 million barrels of oil, natural gas liquid (NGL)

and condensate and 383,000 boed of natural gas. On

December 31 the volume of the Petrobras proven

reserves of oil, condensate and natural gas was 15.01

billion barrels of oil equivalent (boe), representing

0.1% less than the previous year.

The total byproduct production was 2.046 mil-

lion bpd, or 8% more than in 2006. Ninety percent of

installed capacity was used in Brazil and 85% in the

other countries.

Petrobras, the Ultra Group and Braskem signed

an agreement to buy the Ipiranga Group shares for a

total sum of four billion dollars, of which Petrobras

disbursed US$ 1.3 billion. The Company now has

the distribution network of the Ipiranga Group in

North, Northeast and Midwest Brazil, plus 40% of

the Group’s activities in the petrochemicals sector.

In 2007, it also bought out Suzano Petroquímica for

the total price of R$ 2.7 billion.

Petrobras signed a lease agreement of R$ 45 mil-

lion with the company Emae for a 17-year rental of

the Piratininga thermoelectric power plant. The plant

in the city of São Paulo is now part of the Petrobras

generation complex.

Although there has been no change in the

Petrobras capital stock structure in 2007, the ratio

was altered between the shares and the American

Depositary Receipts (ADRs) to two shares for each

ADR. This alteration was intended to make it easier

for the small investor to buy ADRs on the New York

stock exchange.

Considering the implementation of major proj-

ects in the Company, two are worth mentioning: the

Rio de Janeiro Petrochemical Complex (Comperj),

which will process 150,000 bpd of oil to produce

petrochemical raw materials and byproducts from

2012 on; and the Northeast Refi nery (Abreu e Lima

Refi nery), under construction in Pernambuco, with

its start up expected for 2010 and production capac-

ity of 140,000 bpd of diesel. For 2014 the Premium

Refi nery is to start operating, although without a fi xed

site, which will process 500,000 bpd of heavy and sour

oil from the Campos Basin.

Petrobras service station in

Rio de Janeiro

Petrobras invested

45.3 billlion reais in 2007

Assets in Bolivia

In June 2007 all the shares in Petrobras Bolivia Refinación S.A. (PBR) were transferred to the state-owned oil

Company Yacimientos Petrolíferos Fiscales Bolivianos (YPFB) for US$ 112 million. In 2006, the Bolivian govern-

ment decided to nationalize most of the shares of PBR, owner of Santa Cruz and Cochabamba refineries. Sub-

sequent events were negotiation of advanced fair compensation with the Bolivian authorities; continuation

of Petrobras in the partnership, on the condition that it keeps its policies of health, safety and environment

and human resources in the refinery operations; and independent assessment of the share value, according

to criteria normally adopted for this type of transaction.

The sale of all shares to YPFB was the best solution in the interest of both companies. The role of Petro-

bras in Bolivia is currently focused on the exploration and production, and gas and energy segments.

PETROBRAS12

PERFORMANCE IN 2007

PETROBRAS FIGURES

SALES VOLUME

(‘000 BARRELS PER DAY) 2007 COMPARISON WITH 2006 (%)

Brazil 2,035 4

Byproducts 1,725 3

Diesel 705 5

Gasoline 300 -3

Fuel oil 106 6

Naphtha 166 1

Liquefied petroleum gas (LPG) 206 2

Jet fuel 70 9

Other 172 3

Alcohols, nitrogen compounds, biodiesel and other 62 41

Natural gas 248 2

Other countries 1,204 11

Exports 618 6

International sales 586 17

Total 3,239 6

COMPOSITION OF CAPITAL STOCK

SHAREHOLDERS SHARES %

Federal government 1,413,258,228 32.2

BNDESPar 334,269,831 7.6

ADR (common stock) 695,675,776 15.9

ADR (preferred capital stock) 675,831,674 15.4

FMP – Petrobras employee severance indemnity fund 102,326,421 2.3

Aliens (CMN Resolution no. 2689) 341,974,795 7.8

Other individuals and companies 823,701,645 18.8

Total 4,387,038,370 100.0

NOMINAL VALORIZATION IN 2007(%)

Petrobras common stock 92.7

Petrobras preferred stock 77.5

ADR PBR (common) 123.8

ADR PBR (preferred) 107.5

Ibovespa 43.7

Amex Oil 31.3

Dow Jones 6.4

Nasdaq 9.8

Market value (R$ million) 429.9

PETROBRAS SYSTEM

Employees 68,931

Shareholders 272,952

Exploration 70 drilling rigs (43 off shore)

Producer wells 9,569 (828 off shore)

Production platforms 109 (77 fixed; 32 floating)

Refineries 15

Pipelines 23,142 km

Tanker fleet 55 own

Service stations 6,963

Fertilizers 3 plants

Thermoelectricity plants 15

In 2007 the total significant financial incentive

from the government was R$ 2,528.9 billion.

Total byproducts

were

2.046 million

barrels a day,

or 8% above

2006

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 13

VALUE ADDED STATEMENT

YEARS ENDING DECEMBER 2007 AND 2006 (R$’000)

(R$’000) 2007 2006

Income

Sales of goods and services and non-operating results 220,153,532 206,298,241

Provision for settling doubtful debts – constitution (104,156) (13,045)

220,049,376 206,285,196

Inputs acquired from third parties

Consumables (26,304,617) (24,409,419)

Cost of merchandise for resale (36,803,166) (31,470,438)

Energy, outsourcing and other operating expenses (28,495,668) (22,596,832)

(91,603,451) (78,476,689)

Gross added value 128,445,925 127,808,507

Retentions (depreciation & amortization) (10,695,825) (9,823,557)

Net added value produced by company 117,750,100 117,984,950

Added value received in transfer

Income from holdings in relevant investments (582,742) (189,936)

Financial income – includes monetary and exchange variations 2,506,543 2,388,152

Amortization of share premiums and discounts (97,913) (43,279)

Rent and royalties 562,307 554,750

2,388,195 2,709,687

Added value for distribution 120,138,295 120,694,637

Distribution of added value

Personnel & administrators

Wages, benefits and charges 7,059,652 5,952,525

Employee and administrator profit sharing 1,011,914 1,196,918

Retirement and pension plan 2,872,894 1,384,879

Health care plan 1,867,607 1,860,478

12,812,067 10,394,800

Taxation

Taxes, charges and contributions 54,374,015 53,963,591

Deferred income tax and social contribution 477,234 766,329

Government interest 15,753,525 17,311,004

70,604,774 72,040,924

Financial institutions & suppliers

Interest, exchange and monetary variations 6,438,549 3,720,347

Rental and charter expenses 7,028,290 7,026,343

13,466,839 10,746,690

Shareholders

Interest on own capital and dividends 6,580,557 7,896,669

Holdings of non-controlling shareholders 1,742,826 1,593,303

Withheld earnings 14,931,232 18,022,251

23,254,615 27,512,223

Distributed added value 120,138,295 120,694,637

Social and EnvironmentalResponsibility

In 2007 major advances were made in the field of the Company’s In 2007 major advances were made in the field of the Company’s social responsibility, which were to reflect on management and its social responsibility, which were to reflect on management and its stakeholder relations. In its continuous striving to align its operations stakeholder relations. In its continuous striving to align its operations with the ten principles of the UN Global Compact, Petrobras with the ten principles of the UN Global Compact, Petrobras participated in and undertook projects that evidence its commitment participated in and undertook projects that evidence its commitment to reducing social inequalities and minimizing environmental to reducing social inequalities and minimizing environmental impacts of its activities. In recognition, its participation in Dow Jones impacts of its activities. In recognition, its participation in Dow Jones Sustainability Index (DJSI) and São Paulo Stock Exchange Business Sustainability Index (DJSI) and São Paulo Stock Exchange Business Sustainability Index (ISE - Bovespa) was renewed.Sustainability Index (ISE - Bovespa) was renewed.

SOCIAL AND ENVIRONMENTAL RESPONSIBILITY16

COMMITMENT TO SUSTAINABLE DEVELOPMENT

Management challenges in Social

ResponsibilityThe Management Committee for Social Responsi-

bility is the main deliberative body on related issues

in the Petrobras System. It is linked to the Business

Committee and its members are executive manag-

ers from 13 areas in the Company, in addition to the

subsidiaries Transpetro, Petrobras Distribuidora and

Petroquisa.

Its main tasks are to create Social Responsibility

(SR) corporate guidelines and strategies, including

aspects of stakeholder relations. It is also up to this

Committee to monitor the Company’s related activi-

ties and projects, and to assess the performance and

propose actions for alignment and integration.

Some of the matters discussed during 2007 are

the preparation of the SR policy, inclusion of social

responsibility as a corporate role in the 2020 Strategic

Plan, the Petrobras Citizen and Development pro-

gram, Gender Equality action plan, and the SR

indicators and targets in the Company Balanced

Scorecard. Two committees are directly related to

the Committee: the Committee for Drafting and

The Man

bility

in th

Com

ers fr

Assessing Social Responsibility Reports, and the

Diversity Committee.

In 2007, 23 areas of Petrobras Holding and three

subsidiaries were represented on the Committee for

Drafting and Assessing Social Responsibility Reports.

One of its responsibilities is to prepare content for the

Social and Environmental Report and collect informa-

tion for questionnaires that resulted in the renewal of

its participation in DJSI and ISE–Bovespa.

In order to increase the awareness of senior man-

agement with regard to SR matters, Petrobras contin-

ued with the Management Capacity Building Project,

which began in 2006. The project is a partnership with

Uniethos, an institution specializing in SR capacity

building and sustainable development for the business

and academic sectors. The content presents the main

SR principles and its impacts, risks and opportuni-

ties in the oil and gas sector. The Company organized

training for the members of the Board of Directors,

Executive Board, SR Management Committee and

Institutional Communication managers.

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 17

Sustainability Guidelines for the Amazon

The Company used the concept of sustainable de-

velopment to create the Sustainability Guidelines for

Petrobras Exploration and Production in the Amazon.

The guidelines were prepared by specialists and agen-

cies working in the Amazon region, and address topics

such as: protecting biodiversity; operating ecoeff iciency;

contingency control; and cultural, economic and social

interfacing.

The concept of sustainability must be considered

at all stages in the life cycle of the projects and there

must be equal priority between the economic, environ-

mental and social variables. The guidelines also seek to

minimize interference in the natural and ethnic-cultural

processes as well as promote social inclusion.

Petrobras started up the pilot SR capacity

building project for general and executive manag-

ers, based on the Globally Responsible Leadership

Initiative (GRLI). The GRLI consists of executives

from companies and business schools in fi ve conti-

nents and was created by the European Foundation

for Management Development (EFMD), with the

support of the UN Global Compact. The pilot proj-

ect was tailor-made for Petrobras, in a partnership

between Petrobras University, EFMD and Dom

Cabral Foundation. The fi rst module began in 2007

and will continue during 2008.

SOCIAL RESPONSIBILITY IN

THE 2020 STRATEGIC PLAN

When reviewing the 2020 Strategic Plan, social

responsibility now plays a corporate role with a spe-

cifi c management challenge: “to be an international

benchmark in social responsibility in business man-

agement, contributing to sustainable development”.

The 2020 Vision attributes include commitment to

sustainable development and the Company’s recog-

nition as a benchmark in social and environmental

responsibility.

The Petrobras Social Responsibility Policy was

created with the same objective to centralize aspects

in the areas of integrated management, sustain-

able development, human rights, diversity, decent

work, sustainable social investment and workforce

commitment.

Social Responsibility Policy

Petrobras considers social responsibility to be “the form of ethical and transparent integrated business management with all stakeholders, promoting human rights and citizenship, respecting cultural and human diversity, against discrimination, degrading work, child and slave labor, and contributing to sustainable development and reducing social inequality”.1 · Corporate Performance · To ensure that corporate governance of the Petrobras System is committed to ethics and transparency in stakeholder relations. 2 · Integrated management

· To ensure integrated management with social responsibility in the Petrobras System. 3 · Sustainable Development · To conduct Petrobras System business and operations with social responsibility, fulfi lling its commitments in accordance with UN Global Compact principles and contributing to sustainable development. 4 · Human Rights · To respect and support human rights recognized internationally, basing the actions of the Petrobras System on the promotion of the principles of decent work and non-discrimination. 5 · Diversity · To respect the cultural and human diversity of its workforce and the countries where it operates. 6 · Labor Principles · To support the eradication of child, slave and degrading labor in the production chain of the Petrobras System. 7 · Sustainable Social Investment · To seek sustainability of its social investments to achieve decent and productive social inclusion. 8 · Workforce Commitment · To assure the commitment of its workforce to the social responsibility policy of the Petrobras System.

SOCIAL AND ENVIRONMENTAL RESPONSIBILITY18

SUPPORT FOR PRINCIPLES

AND PROJECTS

Global Compact — Petrobras has been signatory

to the UN Global Compact since 2003 and its CEO

is a member of the International Board since 2006.

Petrobras is the only Latin American company to sit

on the Council. In 2007 the Company attended the

International Council meetings and was the mas-

ter sponsor of the 2nd Global Leaders Meeting in

Geneva, Switzerland. The Company was also repre-

sented at the World Network Meeting in Monterrey,

Mexico, where delegations from diff erent countries

discussed their experiences and know-how. In Brazil

the Company is a member of the Brazilian Global

Compact Committee as corporate vice-president

since 2006.

The Social and Environmental Report is sent every

year to UN Global Compact as its Communication

on Progress (COP). The submission of COP is one

of the conditions for organizations to stay active in

the Compact.

Vegetable garden in

the Family Farming

along Pipelines

project, Rio de Janeiro

ISO 26000 - Petrobras continues to participate in

drafting the ISO 26000, the future international stan-

dard on social responsibility to be launched in 2010.

This standard is being developed by the International

Organization for Standardization (ISO) — the top

world organization in developing technical regulations

and standards — in a multi-stakeholder process with

participation of representatives from industry, work-

ers, government, non-governmental organizations,

consumers and academic institutions from more

than 70 countries. Petrobras attended the two interna-

tional working group meetings — in January in Sydney,

Australia, and in November in Vienna, Austria — and

organized thematic workshops for the local Global

Compact networks in Brazil and Mexico.

To further discussion about the ISO 26000

in Brazil, Petrobras signed a partnership with the

Brazilian Association for Technical Standards

(ABNT). Thematic seminars were held in a number

of Brazilian state capitals to spread knowledge about

the future standard.

COMMITMENT TO SUSTAINABLE DEVELOPMENT

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 19

It is one of the companies that contributed to the

ISO SR Trust Fund, which supports the participation

of developing countries with fi nance problems in the

international meetings.

Global Reporting Initiative — The Global

Reporting Initiative (GRI) is an international institu-

tion that provides global guidelines for sustainability

reports through multi-stakeholder polls. The GRI

model is used by the major companies worldwide

to facilitate comparison between the presented data

and information. Since 2006, the Company has been

an Organizational Stakeholder (OS) member of GRI.

In 2007 Petrobras was elected by the other OS to the

GRI International Stakeholders Council, becoming

one of the representatives of the Latin American

industry segment.

World Business Council for Sustainable

Development (WBCSD) — In 2007 the Company

finalized its process that began in 2006 to join the

WBCSD and became the sixth Brazilian company to

sign an agreement with the institution. The WBCSD

brings together more than 200 companies worldwide,

including major international corporations, to further

sustainable development through business solutions.

In Brazil, Petrobras is member of the Brazilian

Business Council for Sustainable Development, as

vice-president of the institution’s Committee for

Corporate Responsibility.

International Petroleum Industry Environ-

mental Conservation Association (Ipieca) —

Petrobras is a member of Ipieca, a global association

representing the upstream and downstream sectors

of the oil and gas industry, specifi cally on social and

environmental issues. The objective of Ipieca is to

create and promote solutions so that all practices

can be socially and economically feasible for the

oil and gas industry, off ering a forum for discussion

and encouraging ongoing improvement of the indus-

try’s performance. The Company is a member of the

Association’s SR committee.

Its members agree to contribute to sustainable

development, supply safety and renewable energies

with social and environmental responsibility; run its

operations and activities with business ethics; develop

and encourage practices and solutions with others in the

industry; and engage its stakeholders, considering their

expectations, ideas and visions, working together with

governmental and non-governmental organizations.

Arpel — The Company is one of the 29 members

of the Regional Association of Oil and Natural Gas

Companies in Latin America and the Caribbean

(ARPEL). Its mission is to promote and facilitate

development and integration of the oil and natural

gas industry, reinforcing its reputation and interac-

tion with society.

Petrobras is represented in eight committees and

chairs the Corporate Social Responsibility Committee,

whose working focus 2007-2011 is to implement SR

among Arpel members, promote community devel-

opment programs in the oil and gas industry, topics

relating to indigenous peoples and governance and

energy integration.

In 2007 Petrobras became a memberof the World Business Council for Sustainable Development and one of the six Brazilian corporations to sign an agreement with the institution

SOCIAL AND ENVIRONMENTAL RESPONSIBILITY20

THE SOCIAL AND ENVIRONMENTAL REPORT (SER)

The Social and Environmental Report (SER) is a valu-

able management tool for the Company. It is not only

a tool for transparency and means of disseminating

the principal actions taken during the year before

its publication, but also plays the role of supporting

the assessment of the form of SR management in the

Petrobras System.

The Committee for Drafting and Assessing Reports

on Social and Environmental Responsibility is respon-

sible for producing the report, which is coordinated by

the Institutional Communication Manager.

Every year a critical analysis of the SER results in the

Vulnerabilities Chart, which evaluates any existing gaps

and fi nds opportunities to improve, and strategies for

SR action. This chart is examined by the Management

Commitee for Social Responsibility.

The Petrobras SER for 2006 was given major recog-

nitions. For the second year running it was considered

notable by the UN Global Compact and an example to

be followed. It was also entitled the GRI A+ seal for top

level quality report assessed by the institution.

This Report contains information referring to

actions between January and December 2007 by the

Petrobras Holding in Brazil and wherever it oper-

ates, and the subsidiaries Petrobras Distribuidora,

Transpetro and Petroquisa.

This year the Company decided to adopt only the

GRI indicators, internationally recognized by busi-

nesses and institutions that publish sustainability

reports. With this change, then, the number of indica-

tors presented dropped sharply compared to previous

publications, which made it possible to go deeper into

the topics to be addressed.

The information was collected by means of the

Follow-up System of Social Responsibility Indicators,

a database guided by the GRI indicator matrix. This

year, 398 professionals from 26 areas and subsidiaries

collaborated to collect information. The entire con-

tent produced from this information was validated by

the Committee for Drafting and Assessing Reports on

Social and Environmental Responsibility.

The publication is audited and revised externally

The Socia

able m

a too

the p

its pu

Report as a management tool

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 21

by KPMG Independent Auditors. Petrobras also once

again is publishing the Ibase/Betinho Social Report

model, which is part of the set of accounting infor-

mation sent to the Brazilian Exchange and Securities

Commission (CVM).

In response to a GRI recommendation, the

Company for the fi rst time performed the Materiality

Test, a poll for stakeholders. The Test was applied

in the cities of São Paulo and Rio de Janeiro, with

participation of representatives of the main stake-

holders in relation to the Report: internal public, sup-

pliers, third sector, academic community, investors,

clients and the general public. They all assessed the

Petrobras 2006 SER based on specifi c criteria and

could give their opinion and mention subjects to be

reported (further details and results in the appendi-

ces — page 109).

After obtaining the results, the Company now had

a guide to the most important topics to be addressed,

the so-called material indicators, and obtained an

external assessment of the 2006 SER.

The Social and Environmental Report is pub-

lished every year in Portuguese, English and Spanish.

This year Petrobras also produces specifi c hardcopy

versions for the internal and general publics, as well

as online and CD versions.

The online version is permanently available in the

Company’s website, on the Social and Environmental

Responsibility page, and is accessible to people with

visual disability.

The hardcopy version is distributed to the main

stakeholders, such as internal public, press, govern-

ment, regulatory agencies, HSE agencies, non-govern-

mental organizations and the academic community.

This year was the fi rst time when Petrobras produced

the Braille version of the hardcopy report, to make it

also accessible to the visually impaired.

Examples can be requested through the e-mail

balancosocial@petrobras.com.br or directly from the

SER Coordinator (address and phone available on the

sleeve of the third cover).

Young reporters of the Japim

community radio in the

Mocoronga Communication

Network, Pará

For the second year running UN Global Compact considered the Petrobras SER notableand an example to be followed

Compiling the data reported in the SER is requested from the responsible

areas and processed using their internal controls and operating systems.

This data is measured according to the instructions by GRI in the indicator

protocols.

Petrobras is committed to responsible growth and to help guarantee human Petrobras is committed to responsible growth and to help guarantee human rights, both in communities where it operates and in supplier and internal rights, both in communities where it operates and in supplier and internal public relations. In 2007 it invested R$ 534 million in cultural, social and public relations. In 2007 it invested R$ 534 million in cultural, social and sports projects. The Company gives priority to community participation, sports projects. The Company gives priority to community participation, respecting local cultures and identities and involving community leaders in respecting local cultures and identities and involving community leaders in every region where it operates at home and abroad.every region where it operates at home and abroad.

Human Rights

24

COMMUNITY DEVELOPMENT

Petrobras intends to reduce risks, prevent negative

social impacts and generate positive results through

relationship programs in communities where it oper-

ates. It adopts ethical standards with its different

stakeholders by means of permanent communication

and dialogue systems with local leaders, to identify

and register the impacts of its activities. The Company

increases its knowledge of local scenarios to assure the

process of social inclusion and improve the quality of

community life.

The Company undertakes cultural, social and

sports projects, respecting the communities living

around its units. According to the Petrobras code of

ethics, it works with community leaders and in accor-

dance with local characteristics. The Company is com-

mitted to its relationship with the community based

on respect for diversity, considering its demands and

expectations. Petrobras analyses the strong and weak

points of each place, helping to strengthen neighbor-

Petrobra

social im

relations

a

s

Impacts on communities

Principle 1 — Businesses should support and respect the protection of internationally

proclaimed human rights

HUMAN RIGHTS

ing communities with poor social inclusion. Its projects

and operations are designed to minimize interference in

the natural and ethno-cultural processes and promote

social inclusion.

In 2007, there was no record of violation of indig-

enous peoples’ rights. Before undertaking any activ-

ity Petrobras upholds official aspects and consults

licensing bodies and the Brazilian National Indigenous

Foundation (Funai). The Company supports a set of

projects in diff erent regions to promote the rights of

the indigenous peoples. Some examples are the Project

to Implement Fish-farming in Indigenous Villages, in

Palmas and Laranjinha, Paraná; the Bracui Indigenous

Food Security Project, in Rio de Janeiro, and the Kani

project, in Tangará da Serra, Mato Grosso.

In 2005, Petrobras encountered setbacks in its oper-

ations in Ecuador from criticism by Ecuadorian social

movements on the Company’s plans to start activities

in block 31 in the Yasuni National Park, Ecuadorian

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 25

Amazon. The park occupies 70% of the most diverse

biomes on Earth and is the home of the Huaorani peo-

ple. Petrobras settled the issue by dialoguing with the

stakeholders. The Company undertook community

projects, infrastructure works and actions to preserve

the indigenous groups belonging to the cultural heri-

tage of humanity. All Petrobras activities in Ecuador

conform to its social responsibility policy.

Petrobras prepared a relationship plan with

the communities in the vicinity of the future Rio de

Janeiro Petrochemical Complex (Comperj), planning

actions for local sustainable development and through

ongoing dialogue. Agenda 21 adopted in Comperj is

based on the Keeping an Eye on the Environment

program and is being built in conjunction with the

Rio de Janeiro state government, business sector and

civil society. The Exploration and Production (E&P)

are using a new licensing method for projects in the

Campos Basin Unit. With the approval of the Brazilian

Institute for the Environment and Renewable Natural

Resources (Ibama), the Environmental Education

Program (PEA) collectively develops local Agendas

21 with priority actions and projects for affected

neighboring social groups, based on local problems,

disputes and potential environmental aspects.

In the Engineering area, responsible for the new

Petrobras facilities and expansion, the environmental

impacts of pipeline projects are assessed after diagno-

sis and health, safety and environment recommenda-

tions. The work in the operational units is done jointly

with non-governmental organizations and other gov-

ernment agencies involved.

Petrobras identifi es the basic needs of the regions

to improve the quality of life around its projects and

sets up projects in support of the communities. On

the international scene, the Mexico Business unit has

contracts for public works with Pemex Exploration &

Production — a Mexican state-owned Company —,

by allocating funds to the infrastructure works. In

Colombia, projects help to optimize and increase the

spread of public utilities, contributing to rural and

urban development. Investments of US$ 252,097

helped improve living conditions and quality of life

in these communities, attending 1,670 beneficiary

households. Petrobras Energia Ecuador complies

with Ecuadorian environmental legislation in the

community relations plans and compensation agree-

ments with the community in the areas of infl uence.

The Company has invested in electric power projects,

water wells, dispensaries, road improvement, sports

facilities and associations.

Petrobras works to preserve and increase health

care in the neighboring communities with services to

monitor and control endemic diseases in its projects.

It is also doing a preliminary study in gas pipeline areas

to control their branch lines and access.

Petrobras activities positively impact the economy of the regions where it operates, benefi ting local businesses

Keeping an Eye on the Environment

The Keeping an Eye on the Environment program has been run by Petrobras since 2005 and

is validated by the Brazilian Ministry for the Environment. The program ratifies the Company’s

commitment to sustainable development of the communities within its area of influence. It helps

build Local Agendas 21 — an action plan for sustainable development that analyses the status of

a state, county or region, with the participation of governments, companies, NGOs and society,

to form partnerships for short, mid and long term solutions — and actions to improve the local

quality of life. Keeping an Eye on the Environment, by using the fully participative community

democracy, is a valuable tool for people’s mobilization and participation by implementing an

action plan for community development.

RESULTS OF KEEPING AN EYE ON THE ENVIRONMENT PROGRAM UNTIL 2007

Mapped households 269,195

Surveyed households 100,220

Accumulated social environmental information 7,215,840

Community Agendas 21 ready (not implemented) 238

Total possible community Agendas 21 338

HUMAN RIGHTS | PRINCIPLE 126

LOCAL PARTNERSHIPS

Stakeholder relations are ongoing and Petrobras

maintains a continuous reciprocal and honest dia-

logue with employees, shareholders, opinion setters,

NGOs, press, public authorities, clients, communities

and suppliers.

The Company forms local partnerships for

capacity building and subsequent recruitment, and

to undertake projects. During the year Brazilian sup-

pliers were allocated 70% of the investments in goods

and service procurement. By giving priority to the

home market, Petrobras contracted US$ 5.24 billion

in goods and US$ 34.6 billion in services to a total of

US$ 39.84 billion.

Petrobras-supplier relations are based on values

established in the social responsibility policy and

code of ethics. The Company imposes regulations on

its suppliers and takes action to develop the market

Artisan in the Carnaúba Viva

project, which produces

straw mats as padding for

Petrobras pipelines

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 27

IMPACTS ON COMMUNITIES

Pr

inc

iple

1

70% of funds allocated to procurement of goods during the year went to Brazilian suppliers

in order to align the supply of procured goods and

services with the corporate guidelines.

Every contract for biodiesel production in the

Company plants gives priority to raw material procure-

ment from rural family-based producers. Petrobras

hires local labor, providing technical assistance and

capacity building to guarantee income and dead-

lines compatible with the activity. The action plan for

Company-related biodiesel units advances rural family-

based producers by procurement of the production.

Petrobras encourages setting up seed banks and build-

ing the productive capacity of the communities, and

prepares studies to benefi t farmers’ households.

In the Amazon, the Exploration and Production

Sustainability Guidelines defi ne Company commit-

ment to prioritizing recruitment of local suppliers that

work with sustainability. In 2007 54% of the contracts

signed by UN-AM were with companies in Amazonas

state. In this way Petrobras seeks to encourage mar-

ket development for the oil and gas industry and to

include small businesses in the supply chain of this

industrial segment.

The Company is aware of the economic impacts

of its activities. When giving preference to local suppli-

ers, it helps to maintain small and medium size service

providers and form partnerships with cooperatives.

The main indirect economic impacts of Petrobras are

on paying royalties and special holdings, value added

tax collection on goods and services (ICMS) and other

taxation. The Plan of Investments in Brazil, mentioned

in the 2008-2012 Business Plan, plans to create 917,000

jobs, with 338,000 indirect ones in income eff ect and

350,000 in the production chain. Added value in the

country, which measures the contribution of Petrobras

to the Gross Domestic Product (GDP), is an average of

around 10% of the Brazilian GDP.

HUMAN RIGHTS | PRINCIPLE 128

Bu

sin

ess

es

sho

uld

su

pp

ort

an

d re

spe

ct th

e p

rote

ctio

n

of i

nte

rnat

ion

ally

pro

clai

me

d h

um

an r

igh

tsP

rin

cip

le 1

PETROBRAS CITIZENSHIP

AND DEVELOPMENT

In the past Petrobras has been including sustain-

ability-related aspects in both its business strategy

and management practices in order to run its busi-

ness according to an economically effi cient, socially

just and environmentally responsible model. The

Company therefore has achieved widespread recog-

nition at home and abroad for its leading role and

capacity to overcome the compensation and mitiga-

tion of social responsibility, successfully including in

I

a

a

n

j

Cultural, social and sports

investments

INVESTMENTS IN SOCIAL PROJECTS IN 2007

LINE OF ACTION NO. OF PROJECTS R$ ‘000

Income and Job Opportunity Generation 321 58,838

Education for Professional Qualification 206 38,745

Guaranteeing Children’s and Adolescents’ Rights (1) 508 110,615

Other 143 14,275

Total 1,178 222,473

(1) Includes transfer to the Childhood and Adolescence Fund, totaling R$ 43.1 million allocated to 284 projects.

its decision-making process the interests of its various

stakeholders.

In 2007, Petrobras allocated around R$ 534 mil-

lion to sponsorships and support for cultural, social

and sports projects. This sum includes R$ 26.1 mil-

lion for the Petrobras Young Apprentice Program

and about R$ 43.2 million to the Fund for Childhood

and Adolescence (FIA), to guarantee children’s and

adolescents’ rights.

The Company is conscious of its role as devel-

opment inducer and in 2007 launched the Petrobras

Development & Citizenship Program, continuing with

actions considered to be successful or promising in

the Petrobras Zero Hunger Program, which directly

and indirectly attended over ten million people with

an investment of R$ 386 million.

The aim of the Petrobras Development &

Citizenship Program, prepared with the help of dif-

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 29

ferent areas of the Company and representatives from

civil society and the government, is to contribute to

local, regional and national development. The objec-

tive of the program is to off er decent and productive

inclusion in society to the socially underprivileged.

By addressing cross-themes, such as gender, racial

equality, people with disability, fi shermen and other

indigenous and traditional communities, the Petrobras

Citizenship and Development seeks to directly and

indirectly attend 17.6 million people and reach 27.5

million people nationwide by dissemination actions.

The program, with initial investment targets of

R$ 1.3 billion in the period 2007-2012, supports proj-

ects that promote development with equal opportu-

nities and valorization of local talents, contributing

to reducing poverty and inequalities. All sponsored

projects are based on respect for diversity and act in

synergy with public policies. The actions are stra-

tegic, systemic and multi-institutional, to achieve

sustainable results. The program encourages social

protagonism, co-responsibility, associativism, coop-

erativism and networking, as well as contributing

to local development in the areas affected by the

Petrobras System.

The strategic actions of the Petrobras Development

& Citizenship Program are focused on:

Investments in social projects that foster social

transformation of the most fringe communities by

transferring resources on a planned and monitored

basis;

Reinforcing social organizations and networks

by interacting between private, public and social

agents to form partnerships and alliances, exchang-

ing experiences, learning, and formulation and dis-

cussion on public policies;

Diff usion of information on citizenship involving

communication campaigns to mobilize and infl u-

ence public opinion, social organizations and the

government for discussion of issues relating to citi-

zenship and human rights.

The Petrobras Development & Citizenship

Program is at a new phase, bringing a set of break-

throughs in the field of the Company’s social man-

agement. First, funds for social projects are now con-

sidered investment, which means that their follow-up

refl ects on the methodology adopted by business proj-

ects. So much so that social investment systematics

are being prepared to base the entire Petrobras System

on standardizing procedures for analysis, selection,

approval, follow-up and assessment of social projects

backed by the Company, and establishing methodol-

ogy, criteria and indicators to be adopted.

Moreover, the program proposes a set of perfor-

mance targets for the social project portfolio, which

includes: priority for young people with 50% of the

public attended in the 15-29 age group; 20% partici-

pants in professional training projects included in the

job market; improved school performance by 60% of

children and teenagers in the projects; completion

certifi cates recognized by the National Professional

Certifi cation System awarded to at least 60% of the

professional training course; and business plans struc-

tured by at least 70% of the income earning projects.

The Company is also developing an information

system to monitor and appraise those involved in

social projects to measure the results produced by

supported actions and follow up the scope of set tar-

gets and objectives. The Company project portfolio

will use this system to be periodically assessed by the

Management Committee for Social Responsibility.

This new management model will help sys-

tematize and measure Petrobras contribution to

social change in the country. It will also share with

Brazilian social organizations its expertise in the

Petrobras allocated 534 million reais to cultural, social and sports projects

CULTURAL, SOCIAL AND SPORTS INVESTMENTS

HUMAN RIGHTS | PRINCIPLE 130

management field by spreading good practices,

networking synergy and fulfi lling the potential of

the results. In this way, it can invest strategically,

adding potential to the results.

Petrobras Development & Citizenship has formed

partnerships with several governmental, non-govern-

mental and community organizations all over Brazil

within three main lines of action:

Generation of income and job opportunity: with

emphasis on the short term, the actions contribute

to productive inclusion of the Brazilian population,

fi nding more immediate solutions to overcome the

poverty in the country. The projects have a strong

emancipating and autonomy-furthering nature. It

encourages the use of technology and off ers suitable

infrastructure for local production arrangements, to

increase their competitiveness with a view to fi nancial

sustainability. Some examples are as follows:

Flour Corridor Project: by means of management

technical assistance and ongoing capacity building

to further the skills of productive units, the project

involves 120 farmers and six fl our mills of family pro-

ducers in six counties in Pernambuco. The actions

aim to revive the manioc production chain in the

region, reinforce and raise community conscious-

ness of their role in Brazilian society, attending the

farmers to meet their expectations and needs;

Ivaporunduva Kilombo Sustainable Development

Project: the project is designed to further social

and economic development, generate income and

improve the quality of life for the 150 households. It

creates an economic alternative to banana growing

— the major economic activity of the Ivaporunduva

community, in São Paulo — by organic handling

and processing of the fruit. The capacity building

of the community for planning sustainable tourism

and structuring a visitors’ center in the kilombo has

helped to fulfi ll its potential for tourism;

Learning professional skills: mid-term actions

give priority to training young people for the labor mar-

ket through professional training and building a life

project, considering their concerns, dreams, vocations

and talents. This is the case in the following projects:

Human Capacity Building , Planting Forests and

Guaranteeing a Future: with organic production

and sale of farm produce, around 50 households

in Alagoas benefi t from the project through actions

taken for capacity building and technical skills in

production and marketing of the products. There is

also capacity building for environmental education

with a view to reforesting the Atlantic rainforest;

The Young who Samba, Work and are Happy:

teaches skills to young people in a social risk sit-

uation in poor communities in the city of Rio de

Janeiro and taking socio-educational measures for

adolescents on probation. The project gives pro-

fessional training in fi ve activities of the so-called

“Carnival Industry”. The activities in a logical pro-

duction cycle, such as modeling, dressmaking, wire

working, accessories and headdresses, help gener-

ate work and income for a segment of society that

has huge diffi culties to fi nd their fi rst job. The proj-

ect workshops on citizenship and Brazilian culture

further cultural, economic and social protagonism

among young people, and encourage them to stay

on at or return to school. In 2007, partnership with

Portela Samba School helped create jobs for the

preparations of the 2008 samba school parade, on

the theme of ‘water’, giving the young more knowl-

edge about the environment.

Guarantee the rights of the child and adolescent:

a long-term outlook, seeking to break the perpetuating

cycles of poverty in Brazil, and the actions are in line

with the paradigm of full protection. They address the

child and adolescent as having rights and absolute pri-

ority, since they are at a special stage of development.

The following are some examples of projects:

Implementing the Millennium Goals for Children

in Semi-Arid Brazil — UNICEF Seal of Approved

Municipality: the idea of the project is to help

achieve the Millennium Goals for children and

adolescents in 1,118 municipalities in 11 semi-

arid states of Brazil. Local players and talents with

strong community participation and children and

adolescents are mobilized and coordinated so that

mayors, governors and the federal government can

work to achieve the goals and commitments within

the sphere of the National Compact: A World for

the Child and Adolescent in Semi-Arid Brazil;

Educational Radio Soap Opera Broadcast to

Protect the Rights of Children and Adolescents:

the project is in Pará, North Brazil, and trains social

agents in the subject of addressing violence against

children and adolescents, providing content for

the educational radio soap operas. Through the

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Income earning and job opportunity projectsdesigned to structure a business plan and increase income by at least 60%

experience of training, production and multiplica-

tion of the social technology, 360 agents from the

Guaranteed Rights System help in compliance with

the Statute of the Child and Adolescent.

Every year Petrobras organizes a public selec-

tion of social projects with increasing investments

to democratize the access to its resources and assure

transparency in the selection of the supported projects.

Social organizations all over the country are invited by

public invitation to enroll projects and become part-

ners of the Company in fi ghting against poverty and

misery in the country. The proposals received are ana-

lyzed by examiners in and outside the Company.

The selective process for Petrobras Citizenship

and Development involves all states in Brazil and in

2007 received 6,485 applications for sponsorship

by NGOs, governmental and community agencies,

universities and institutions. This record number of

applications is 43.6% up from the 4,517 projects reg-

istered in 2006 in the Petrobras Zero Hunger Program.

The maximum value of R$ 660,000 per year was allo-

cated to the selected projects, with possible renewal

for another two years. The registered projects pri-

oritize actions to include the young and benefi ciary

people and families to be included in the Bolsa Família

Program. Projects involving the Social Technology

Network are given priority, right from the selection

process to the assessment of results in the public

selection. They off er methodologies that can be re-

applied, developed with community interaction and

represent eff ective solutions for social transformation

so that they can be adopted as public policies.

The results of the 2007 public selection will be

announced in May 2008 and journalists have been

invited to all stages of the selection process. During

the registration period, Petrobras organized Social

Caravans — classroom workshops to train organiza-

tions and other stakeholders how to prepare projects.

The Caravans, with free admission and open nation-

wide, had 2,800 participants and helped explain

doubts about rules and regulations or the selective

process. Virtual caravans were also available in the

Internet, open to all stakeholders. This new item had

8,000 visitors.

In a widely publicized and transparent process,

the projects considered undergo a series of admin-

istrative and technical analyses, and are submitted

to a committee of Company workers and distin-

guished professionals from the third sector, press

and academic world. Projects in the public selec-

tion that were highly rated but could not be spon-

sored because of limited resources are included in

the Petrobras Project Portfolio. To encourage social

responsibility actions with partner companies, cli-

ents and suppliers in the Petrobras business chain,

the portfolio helps mobilize new players in the busi-

ness sector to develop partnerships, nominating and

recommending projects designed to transform the

Brazilian social reality.

GOALS OF PETROBRAS DEVELOPMENT & CITIZENSHIP 2007-2012

Total investments R$ 1,293 billion

Total people attended direct and indirectly 17,631,804

Total people reached (promotion actions) 27,248,447

CULTURAL, SOCIAL AND SPORTS INVESTMENTS

HUMAN RIGHTS | PRINCIPLE 132

PETROBRAS CULTURAL PROGRAM

The Petrobras Cultural Program (PPC) is the larg-

est and most important cultural incentive action ever

developed by the Company. Every year it sponsors

projects from a wide variety of cultural segments to

guarantee democratic access to incentive funds con-

sidering cinema, music, literature, historic monu-

ments, immaterial heritage, and scenic and visual arts.

The PPC record budget of R$ 80 million in 2006/2007

allocated R$ 60 million to projects that had been

approved in the public selection and guest projects

of the Petrobras Cultural Council. Some projects in the

public selection areas had a higher number of projects

and increased budget, for example, short fi lms.

PPC was launched in 2003 jointly sponsored by

Petrobras Distribuidora and Holding, to combine

the four existing programs: Petrobras Visual Arts

Program, Scenic Arts Program, Cinema Program

and Music Program. During these four years, PPC

sponsored 889 projects from the public selection

with an investment of R$ 201.8 million. PPC added

the new line Formation to the two already exist-

ing lines of action - Preservation and Memory, and

Production and Diff usion. Formation, which includes

art and culture in education, intends to increase the

possibilities of critical reception of the arts and other

cultural expressions. The cultural support guidelines,

in line with the sector’s public policies, help valorize

Brazilian culture and off er more opportunities for cre-

ation and circulation, enjoying the off er of its benefi ts

and revenue, as well as the ongoing construction of

the Brazilian cultural memory. The program’s lines of

action include:

Petrobras sponsored a total of

1,178 social projects in 2007

Preservation and Memory: projects to protect

the memory of arts in Brazil, immaterial heritage and

the work of museums, archives and libraries. Some

examples are:

Restoration of the works of Nelson Pereira dos

Santos: fi lms directed by Nelson Pereira dos Santos,

whose work representing Brazilian cinema and cul-

ture includes some of his most sought after movies

by cinema schools, television channels, festivals

and other national and international festivals;

Museum of the Inconfidencia, Minas Gerais:

refurbishing and modernizing the museum with

new paintwork, roof repairs, building furniture

and showcases for exhibitions, fi ber optic lighting

project to enhance the works and restoration of

the three buildings;

Kuikuro Rituals of the Upper Xingu — Traditions

and New Memory Technologies in Mato Grosso:

a project to preserve the immaterial heritage of the

Karib-speaking Kuikuro indigenous people inhabit-

ing the upper reaches of the Xingu River, and who

aggregate the three main linguistic chains in South

America: Tupi, Karib and Arawak.

Production and Diff usion: projects that produce

movies, music, scenic arts and literature, in addition to

diff usion and democratization of access to culture.

Pixinguinha Project : is organized by the Brazilian

Arts Foundation (Ministry of Culture - MinC) and

consists of caravans of musicians, producers and a

technical team traveling around Brazil to meet per-

formers with diff erent musical profi les representing

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the rich diversity of Brazilian music. Public admis-

sion to these music shows is free or with a small

entrance fee. The project provides free workshops

to the communities visited, with classes given by

the traveling musicians;

Giramundo Puppet Project : Petrobras has been

sponsoring the Mini Ecological Theater project

for four years. The theater is run by Giramundo in

Minas Gerais, one of the most traditional puppet

groups in Brazil. Its work helps children and young

people to learn more about environment using the

puppet theater language;

Feature fi lm The Year My Parents Went on Vacation:

award-winning fi lm chosen to represent Brazil as

one of the movies nominated for the 2008 Oscar

in the best foreign movie category.

Formation: projects that include art and culture in

education, furthering possibilities for a more critical

view of the arts and other cultural expressions:

Edisca Dance School in Ceará : designed to foster

the development of 400 children and adolescents

to consolidate education through art, learning and

social projects;

The 5-Vision Project , in Rio de Janeiro: its idea is

to off er audiovisual technical formation (camera-

man’s assistant/electrician, video camera operator,

direct sound operation and art director’s assistant).

It holds courses approved by the Brazilian Ministry

of Education and that are part of the federal gov-

ernment’s Factory School. The project works with

students in the 16-24 age group with per capita

income of a 1.5 minimum wage, who are enrolled

in a regular basic education course (primary or sec-

ondary education) or in the young people and adult

education program (EJA).

The Company encourages the registration

of projects all over Brazil through the Petrobras

Cultural Caravan, which gives talks in various towns

in the country.

In addition to PPC, other sponsorships concen-

trate on the image return of the Petrobras logo, to com-

plement actions taken by PPC and attend Petrobras

business requirements. Some examples here are spon-

sorship to the Petrobras Symphonic Orchestra, Corpo

and Galpão groups and the music, movie and scenic

arts festivals.

Petrobras Cultural Program had record funds of80 million reais in 2006–2007

The CD with northeastern

folk music of ciranda, cocos,

maracatus and afoxés by Lia

de Itamaracá - nominated

Unesco Living Heritage -

was awarded the Petrobras

Special Cultural Prize

CULTURAL, SOCIAL AND SPORTS INVESTMENTS

HUMAN RIGHTS | PRINCIPLE 134

In 2007, the Company also played a leading

role in supporting the public policy on culture. With

the Petrobras/Brazilian Ministry of Culture (MinC)

Extraordinary Action, the Company formed a partner-

ship for projects all over Brazil, and invested R$ 90 mil-

lion in the creation of a public selection invitation in

several fields, namely: popular and classical music,

television, cinema, theatre, dancing, circus, plastic arts

and indigenous culture, focus on the elderly, culture

and thinking, and restoring historic monuments. It

also invested in formation and education projects for

arts, namely the National Circus School and Living

Culture Award, for example.

The sponsor has 100% tax benefi t from supported

projects, as in the case of short fi lm production, and

30% to the sponsor with limited tax benefi t with popular

music projects, for example. In addition to the approval

of the Rouanet Act — federal law 8,313, which allows

sponsors to deduct 4% from income tax -, the projects

are submitted to the Institutional Communication

Sub-secretariat Sponsorship Committee of the General

Secretariat of the Presidency of the Republic (Secom),

where they are approved before contracting.

SPORTS SPONSORSHIP

The Company is a major Brazilian sports sponsor and

invests in Petrobras Motor Sports program, involv-

ing diff erent car racing categories directly related to

its business, and Petrobras Performance Sports,

involving soccer, handball, tennis and surfi ng.

In 2007 the Company invested around R$ 80

million in sports sponsor programs, supporting the

Brazilian Olympic Committee through the XV Pan-

American Games Rio 2007. It was also a forerunner

in using the Sports Incentive Act, allocating more

than R$ 23 million in preparing the Brazilian delega-

tion for the 2008 Beijing Olympic Games.

XV Pan-American Games Rio 2007

The sponsorship of the XV Pan-American Games

Rio 2007 was the main sports investment made by

Petrobras in 2007. The competition is a continental

version of the Olympic Games, including sports

from the Olympic Program and other non-Olym-

pic sports. About 5,500 athletes from 42 countries

competed in the Pan-American Games, promoting

technical exchange and discovering new talents

Brazil’s national

male handball

team sponsored by

Petrobras

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CULTURAL PROJECT INVESTMENTS IN 2007

ACTION LINE R$ ‘000 NO. OF PROJECTS

Music 53,913 247

Cinema 42,855 249

Scenic arts 35,959 131

Culture and society 19,095 49

Historic monuments 17,781 68

Visual arts 12,351 10

Museum support (collection) 8,788 26

Immaterial heritage 6,941 41

Cultural spaces 3,498 47

Literary events 3,340 122

Architecture and urbanism 873 28

Archeology 124 2

Total 205,518 1,020

and record breakers. Its support of the Games reaf-

fi rms Petrobras commitment to developing national

sport and encouraging the practice of sports as an

essential element in people’s formation. To sponsor

this event, the Company looked at decisive factors,

such as the strong social impact of the games, the

jobs created during the infrastructure construction

stage and involvement of various sectors in selling

products and services during and after the Games.

Petrobras Performance Sports

The partnership between Petrobras and the Brazilian

Handball Confederation is to develop and consoli-

date Brazilian handball through its ongoing sup-

port to the Olympic Men’s and Women’s Olympic

teams. The sponsorship is associated with social

responsibility in its support of the Mini-Hand proj-

ect providing sports training to kids in low-income

communities.

In 2007, the fourth year of the Petrobras Tennis

Cup was played in Brazil, Argentina, Colombia,

Paraguay and Uruguay, a major event for the inter-

nationalization process of Petrobras in strategic

South American markets. The championship is

considered the top professional circuit in Latin

America of the Challenger Series of the Professional

Tennis Players Association (ATP) and was disputed

in countries where the Company operates.

Petrobras also invests in Brazilian surfi ng through

its Surfing Festival, Women’s Surfing Circuit,

Longboard Classic and Men’s Surfi ng Selective.

Petrobras Motor Sport

The car racing and motorbike categories are a test

laboratory for Petrobras. Motor sports sponsor-

ship, from Kart to Formula 1, is used to develop new

products, namely fuels and lubes, to give better per-

formance and mitigate environmental impact. The

vehicles test the products in more demanding con-

ditions, for example, at speeds over 300 km/h and in

the heat of African deserts.

Since 1998, the Company has had a technical part-

nership with the Williams Formula 1 squad. Petrobras

develops and supplies it with special fuel, high tech-

CULTURAL, SOCIAL AND SPORTS INVESTMENTS

HUMAN RIGHTS | PRINCIPLE 136

nology for better engine performance in trials and

races. The high octane Podium Gasoline is the result

of research done during Formula 1 races.

Petrobras sponsors the Petrobras Lubrax team

at the world’s main rallies — the Dakar Rally and

International Sertões Rally. The Company also spon-

sors the Superbike 100cc category through its own

Team Scud in the Brazilian Racing Bike Championship

and is exclusive fuel and lube supplier for the Brazilian

Formula Truck Championship. It is also sponsor to

prototype competitions Formula SAE and Baja SAE

and the Petrobras Kart Selective.

In 2007 the Company became offi cial fuel pro-

vider to Stock Car, the main Brazilian car racing cate-

gory. Petrobras uses the V8 and Light vehicle catego-

ries as a laboratory to upgrade its new fuel. Cleaner,

safer and with performance required by Stock Car

vehicles, the fuel with low sulfur and no lead content,

substituted aviation gasoline that contained health

hazard tetraethyl. Besides contributing to the well-

being of the team members, the Company reaffi rms

its commitment to the environment.

SPORT PROJECTS INVESTMENTS IN 2007

ACTION LINE R$ ‘000

Performance sports 29,655

Motor sports 26,948

Incentive sport 23,386

Total 79,989

Its sponsorship of motor sports has helped Petrobras test and develop top

performing fuels and lubes withlow environmental impact

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 37

Principle 2 — Businesses should make sure they are not complicit in human rights abuses

SupplierrelationsGOOD PRACTICES

ASSURED IN CONTRACTS

In conformity to its social responsibility policy,

Petrobras bases its actions, as stated in the Human

Rights principle, on furthering the principles of

decent work and non-discrimination. Petrobras stip-

ulates that goods suppliers should provide objective

evidence to assure and demonstrate their commit-

ment to adopting the premises stated in the social

responsibility management process.

Petrobras supply regulations are quite transpar-

ent for businesses to provide the high level required

in the oil industry. The Company includes clauses

on human rights, social responsibility and health,

safety and environment in all supplier agreements.

Every supplier is previously assessed for compli-

ance with labor, social security and tax laws, and is

only contracted when its conformity is confi rmed.

All goods and service procurement agreements pro-

vide clauses against child, forced or degrading labor,

in order to guarantee quality in goods and service

I

P

R

d

u

supplies. Should such practices be discovered, the

contracts are cancelled and the companies may be

penalized.

Petrobras has defi ned some procedures for quali-

fying suppliers to improve management of the goods

and service procurement process. A central model of

the Petrobras Goods and Service Suppliers Register

has been implemented to help integrate the activities

for assessing the Company’s suppliers and supplies.

The register includes requirements for safety, occu-

pational health, environment and social responsibil-

ity, and enhances assessment of economic, legal and

technical requirements.

Through the supplier register, Petrobras encour-

ages companies to complete the questions in Ethos

indicators for social responsibility referring to human

rights. Suppliers who answer the questionnaire

receive reports with comparative analyses of results

per business segment, for better planning to upgrade

SUPPLIER RELATIONS

38

their actions. By the end of 2007, 665 companies had

completed the Ethos questionnaire and their ratings

were calculated. From January 2008 completion of

the questionnaire will be mandatory in application

and renewal requests for registration.

TRAINING IN HUMAN RIGHTS

AND SOCIAL RESPONSIBILITY

Petrobras holds training courses for and dis-

seminates ethics and social responsibility, including

content on human rights relating to its employees.

The work in capacity building includes training semi-

nars and capacity building of multipliers of the code

of ethics, including a round table on bullying and

diversity. In 2007, 53,543 hours of capacity build-

ing in social and environmental responsibility were

counted, with classes attended by 2,956 employees

and 220 outsourcees. Through its specialization in

social responsibility and development management,

Compliance with labor, social security

and tax laws is a requirement to be a Petrobras

goods and service supplier

HUMAN RIGHTS | PRINCIPLE 2

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Petrobras University offers courses on principles

and concepts, certifications and tools — AA1000,

Social Auditing, Social Balance Scorecard, GRI, Ethos

Indicators and Tools, NBR 1601 —, community rela-

tions, as well as seminars, conferences and special

projects, sustainable human development, volun-

teers and ethics.

The Company gives talks to inform about and

explain the code of ethics to managers, supervisors,

coordinators, contract inspectors and adapting new

employees. During the year, the entire workforce was

trained in the code of ethics, emphasizing aspects

relating to human rights and relations with employees,

clients, suppliers, service providers and society.

Every year the Company trains all members

of the property security staff , in accordance with

corporate regulations and standards. Recruited

employees do a recycling course every two years

on notions of criminal law and physical security of

the premises. In order for contractors to realize the

importance of HSE guidelines, they are provided

with Petrobras standards with risk matrix, as well

as the requirements for hiring service providers,

strictly in compliance with the selection criteria

and a periodical assessment.

Petrobras encourages

procurement of social

promotional items

from sponsored

projects, such as, for

example, Kaingang

handicra� in Paraná

40

Loom Program (Tear) weaving

sustainable nets

CASE STUDY HUMAN RIGHTS

HUMAN RIGHTS

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 41

Petrobras works on the basis of ethical, transparent

management with respect for the different stake-

holders with which it relates. In order to dissemi-

nate values and practices of social responsibility, the

Company interacts with its production chain seeking

to form other relations with small and medium-sized

enterprises (SMES) and offers the use of tools for

sustainable business.

Accordingly, in 2005 the Company joined the

Loom Program (Tear) — Weaving Sustainable Nets,

headed by the Ethos Institute and organized by the

Multilateral Investment Fund of the Inter-American

Development Bank (IDB).

The program involves flagship companies in the

seven strategic economic sectors: sugar and alcohol,

civil construction, electricity, mining, oil and gas, steel

and retail. These companies are top ranking in their sec-

tors because of their size and share in the national GDP

and have a strong influence on their value chains. In

order to implement the network, each Company chose

15 to 20 SMEs from their suppliers and clients to incor-

porate and extend socially responsible management.

In addition to the flagship companies, the pro-

gram has partners that contribute to disseminating the

methodology to other companies and value chains in

the same sector or region. This creates an integration

network with a proven multiplying eff ect. Using this

formula, inducement agents have emerged and convey

know-how to all stakeholders. These inducements are

invaluable, since they are based on the large produc-

tion centers and have nationwide coverage reaching

out to the SMEs in the Brazilian countryside. A sus-

tainable economy with corporate satisfaction and ser-

vice to neighboring communities, whatever their size,

means general satisfaction and, most of all, regional

and national progress.

The Loom Program has helped create 139 working

groups over a total of 3,257 hours of consulting services

to the SMEs. As a result of the program, publication of

valuable tools were launched, such as: Business Social

Responsibility (BSR) in Management Processes and

Value Chains; Essential Criteria for Business Social

Responsibility and their Inducement Mechanisms in

Brazil; Loom (Tear) Methodology of Working in a Value

Chain and National Research on BSR practices.

The sharing of experiences with other flagship

companies in the Loom Program occurred at the

meetings of the working groups and regional semi-

nars. Each event involved presentation of effective

practices, preparation and validation of action plans of

the fl agship companies in disseminating social respon-

sibility in their value chain. Petrobras uses the program

to provide further information about the concept of

social responsibility and increase market opportuni-

ties for SMEs working in its value chain. The Company

seeks to involve partners that can multiply the experi-

ence to other sectors and induce more companies to

adopt the methodology.

Through its unit in Macaé (Rio de Janeiro state),

Petrobras has selected 20 small and medium size busi-

nesses operating in its production chain and under-

took a training program to upgrade the management

models in social responsibility. The positive result was

assessed at the 2nd Seminar of the Loom Program in

Rio de Janeiro in November 2007 sponsored by the

Company. The event was attended by approximately

200 delegates.

Petrobra

managem

holders w

n

C

PETROBRAS PRODUCTION CHAIN RESULTS IN 2007

SMEs that began in the production chain 16

Application of Ethos indicators 12

SMEs that enhanced sustainable management (Mission, Vision and Values) 12

Actions prepared by SMEs 44

Actions taken 12

Actions taken and MDG-related 9

Mobilized employees 258

Clients involved 7

LaborPetrobras conducts its operations with respect for its workforce and strives Petrobras conducts its operations with respect for its workforce and strives to achieve everyone’s satisfaction and commitment in terms of its values to achieve everyone’s satisfaction and commitment in terms of its values and behaviors. The number of employees in the Petrobras System was and behaviors. The number of employees in the Petrobras System was 68,931 in 2007, 10.7% more than in 2006. The Company has grown both 68,931 in 2007, 10.7% more than in 2006. The Company has grown both in number of employees and in facilities and operations and continues to in number of employees and in facilities and operations and continues to reach levels of excellence in health and safety.reach levels of excellence in health and safety.

For the very first time, the Level of Commitment to Social Responsibility For the very first time, the Level of Commitment to Social Responsibility (LCRS) was measured by the Organizational Ambience Research. The LCRS (LCRS) was measured by the Organizational Ambience Research. The LCRS was 81%, which means a high rate of employees committed to the issue.was 81%, which means a high rate of employees committed to the issue.

LABOR44

WorkforceNUMBER OF EMPLOYEES IN

THE PETROBRAS SYSTEM

Of the 68,931 employees, 6,783 work in interna-

tional units and the other 62,148 in Brazil, allocated

to the Petrobras Holding and following subsidiar-

ies: Petrobras Distribuidora, Transpetro, Liquigás,

Petroquisa and Refap. The Petrobras System also has

a total 211,566 employees from service providers.

Considering the large number of companies in the

Petrobras System, only the direct subsidiaries will be

reported in this Social and Environmental Report.

Of the 68,

tional units a

to the Petro

ies: Petrobr

Petroquis

TOTAL EMPLOYEES IN THE PETROBRAS SYSTEM

COMPANY CONTRACT FOR INDETERMINATE TIME

CONTRACT FOR DETERMINATE TIME

SPECIAL CONTRACT TOTAL

Petrobras Holding 50,190 17 50,207

International area 6,646 137 6,783

Transpetro 3,802 316 26 4,144

Petrobras Distribuidora 3,598 10 3,608

Liquigás 3,298 3,298

Refap 788 788

Petroquisa 102 1 103

Total Petrobras System 68,424 453 54 68,931

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 45

PERSONNEL PER REGION IN BRAZIL

COMPANY SOUTHEAST SOUTH NORTH MIDWEST NORTHEAST TOTAL

Petrobras Holding 34,910 1,758 1,187 109 12,243 50,207

Transpetro 2,958 201 602 55 328 4,144

Petrobras Distribuidora 2,340 283 181 245 559 3,608

Liquigás 1,839 785 96 154 424 3298

Refap 788 788

Petroquisa 96 2 5 103

Total Brazil 42,143 3,815 2,066 565 13,559 62,148

INTERNATIONAL PERSONNEL – BY COUNTRY

COUNTRIES TOTAL PERSONNEL

Argentina 4,996

Bolivia 491

Colombia 373

Uruguay 283

USA 218

Paraguay 206

Venezuela 102

Angola 28

Nigeria 28

Mexico 25

Libya 19

Turkey 10

Chile 4

Total International Area 6,783

TOTAL EMPLOYEES (BY JOB TYPE)*

Shift 12,491

Administrative 36,274

On call 5,981

Off shore 2,855

Field special 483

Air support 37

Operational 3,986

Technical 41

Total 62,148

*Not including personnel of units outside Brazil

Petrobras had 68,931

employees by the

end of 2007

LABOR46

Safety, health and quality of life

SAFETY REGULATIONS

The Company is very concerned with its workforce,

which it considers to be one of its most valuable assets.

Care with the workers’ health is at the same level of

quality required in the entire production process. In

2007, R$ 2.57 billion was invested in occupational

health and safety in the Petrobras Holding.

A number of programs were developed to improve

the quality of the workers’ life. By adopting the concept

of complete health, these programs involve physical,

emotional and social aspects, in addition to assessing

and preventing impacts from occupational and envi-

ronmental hazards on the health of the workforce and

neighboring communities.

The projects relating to employees’ health and

safety comply with the corporate HSE guidelines and

policy, and with the 2007 Collective Labor Agreement

(ACT 2007) in Brazil. Petrobras is also guided by the

Health, Safety and Environment Committee linked to

the Business Committee. In one of the HSE guidelines,

the Company agrees “to act to promote health, and to

The Com

which

Care

quali

2007

protect the human being and environment by identi-

fying, controlling and monitoring risks, adapting the

safety of processes to the best international practices

and always ready in emergencies.”

The Occupational Health Regulations and

Procedures cover the following topics: occupational

medical tests, noise exposure, working conditions on

off shore platforms, occupational dental examinations,

health certifi cates and sick leave. The Company also

has the Occupational Health Medical Control Program

in which the workforce is monitored and instructed on

such aspects. All workers have an Occupational Health

Certifi cate and the facilities have operational proce-

dures with instructions to minimize risk exposure.

ACT 2007 has a chapter devoted solely to health

care, detailing such topics: periodical medical exami-

nation, HSE committees for workers, House Accident

Prevention Committee (Cipa), programs on nutrition

and periodical nutritional assessment, occupational

preventive health care, contingency program, occupa-

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 47

tional safety prevention, fi refi ghting, biological environ-

mental monitoring and health policy, for example.

There are also specifi c clauses on participation of

employee representatives in investigating serious and

fatal accidents, and the guarantee to the right to refuse

work in conditions of serious imminent risk.

HEALTH MANAGEMENT

AND QUALITY OF LIFE

The workforce participates in HSE-related discus-

sions through formal committees, such as Cipa, for

example, where all employees and outsourcees are

represented.

Every year, various events and campaigns are

organized to invest in accident and disease preven-

tion and to improve the health of the workforce, such

as the Health Promotion Workshop and Health Week.

On the occasion of the fl u vaccination campaign, the

vaccine is free to employees and outsourcees, as

well as to other benefi ciaries of the Multidisciplinary

Health Care (AMS). For example, nine campaigns on

consciousness in HSE were run in the engineering

projects to improve the HSE performance in specifi c

areas. Two of the topics discussed were hand accident

prevention and sexually transmissible diseases.

The Company offers its employees the benefit

of psychotherapy to facilitate the treatment of psy-

chosomatic disorders, psychological or stress-related

problems. The employee’s participation in this kind of

expenditure is 50% until the third year of treatment

and then after the fourth year it is fi xed at 100%.

On its projects in North Brazil, Petrobras uses

the Endemic and Vector Control Monitoring Service

along the Urucu-Coari-Manaus gas pipeline. Petrobras

does a preliminary study and assesses the possible

consequences of parasite reproduction in the com-

munities in the areas of the gas pipeline construction.

Based on this study, the local health departments are

then involved in prevention and control actions, plus

diagnosis and treatment of cases of malaria in neigh-

Laboratory worker in the

Leopoldo A. Miguez de Mello

Research & Development Center

(Cenpes) in Rio de Janeiro

LABOR48

SAFETY, HEALTH AND QUALITY OF LIFE

FATALITIES

2003 2004 2005 2006 2007

Employees

Outsourcees

163

19

151

150

81

141

16

15

9

15

FREQUENCY RATE OF CASUALTIES

WITH LEAVE (TFCA)*

1.23

1.04

0.9

7

0.7

6

0.7

7

2003 2004 2005 2006 2007

* TFCA: Number of casualties per one million

men-hours with exposure to risk

boring communities. The health of the workers and

the communities close to the works is also monitored,

as well as accidents caused by poisonous animals and

water-transmissible diseases.

HIV/AIDS policy — The Company seeks to

cooperate affi rmatively in developing public policies

on AIDS information and prevention. This is why it is

in constant contact with national and international

organizations responsible for surveillance, assistance

and research about the disease.

The Petrobras HIV/AIDS policy guarantees non-

discrimination in the workplace, confi dentiality if the

virus carrier informs the Company about his/her con-

dition and advisory and health care services. It off ers

medication, including for the dependents of the virus

carrier, and trains the Company’s health professionals

to attend the HIV-positive worker. Petrobras provides

all its employees with free diagnosis tests, at their own

request. As preventive measures, the Company runs

informative campaigns among the workforce. In this

way everyone can learn about transmission, adopt safe

behavior and understand the individual risk.

Ergonomic Risk Management — The Ergo-

nomic Risk Management Project was set up to solve

and prevent problems caused by incorrect posture or

an inadequate workplace.

Some units have now developed ergonomic

programs with positive results. However, it is neces-

sary to establish corporate guidelines to standardize

the actions in order to encourage healthier habits

and comply with the safety and health regulations.

Employees who request this service are given specifi c

instructions about their posture and workplace.

SAFETY AND HEALTH

INDICATORS

Petrobras intends to achieve safety standards that place

it at the same level as the world’s best oil and gas majors.

This is why its Strategic Plan set the target of 0.5 for the

Frequency Rate of Casualties with Leave (TFCA) for

2010, including its own employees and contractors,

representing a level of international excellence.

To meet this target, the Company has adopted

safety standards beyond the requirements of Brazilian

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 49

PERCENTAGE OF TIME LOST (PTP)

2.8

8

2.5

7

2.4

8

2.19

2.0

6

2003 2004 2005 2006 2007

FATAL ACCIDENTS RATE (FAR)*4

.57

3.3

0

2.8

1

2.28

1.61

2003 2004 2005 2006 2007

* TAF: Number of fatalities per 100 million men-hours with exposure to risk

legislation, as commended by the Corporate HSE

Guidelines and Policy.

Another action to monitor operations is the

Corporate Accident Registration System (Sisin),

which includes all information on safety. It obtains

the indicators for accidents with injury to employees

and outsourcees and reports are issued to follow up

and control accidents, abnormal occurrences and

the costs involved.

In 2007 Petrobras recorded a drop in the TFCA

from 0.77 to 0.76, continuing the downward trend

of previous years. This reduction occurred in the

scenario of an increase in the number of employees

and outsourcees and, consequently, operations. The

Fatal Accident Rate (TAF) rose from 1.61 in 2006

to 2.28 in 2007 and the number of fatal casualties

in the workforce increased from nine to 15 cases.

Of this total, nine were involved in road accidents,

motivating special attention to safety in that area.

The increase in this indicator was infl uenced by the

inclusion this year of occurrences registered in the

transportation area for distribution.

The Corporate Accident Registration System includes all data of the safety area and provides indicators for follow-up and control

LABOR50

Pay and benefi ts

CONTRACTING, JOBS,

PERFORMANCE AND WAGES

Employees are recruited in Brazil by means of a public

selection process. In other countries the recruitment is

done by analyzing resumes and interviews. Due to the

Company’s strong growth the Business Plan expects

admissions of 14,000 professionals by 2012 to occupy

positions in various areas.

The Company’s payroll is consistent with the

professional work performed jointly with the respon-

sibilities involved. In 2007, negotiations were con-

Employ

s

done

Compan

admissio

PROPORTION OF LOWEST WAGE COMPARED TO BRAZILIAN MINIMUM WAGE

COMPANY LOWEST WAGE PROPORTION

Petrobras Holding R$ 1,400.88 3.69

Petrobras Distribuidora R$ 1,030.35 2.71

Liquigás R$ 577.60 1.52

Transpetro R$ 622.23 1.64

Petroquisa R$ 1,265.06 3.33

* Minimum wage in Brazil in 2007: R$ 380.00

cluded between Petrobras, the Petrol Workers’ Union

Federation (FUP) and trade unions, culminating in the

agreement for implementing the new Job Assessment

and Rating Plan (PCAC 2007), in which the new job

and wage tables were defi ned. Pay is defi ned accord-

ing to wage levels and they, in turn, are within specifi c

ranges for each job.

In accordance with house policies, there is no

relation between remuneration and individual per-

formance. All employees receive their annual Share

in Profi ts and Results (PLR) based on the Company’s

economic performance.

Concerning outsourced labor, Petrobras agreed to

upgrade the hiring process of service providers, with

emphasis on guaranteeing the collection of labor obli-

gations during the term of the service contract, with

a view to the labor, social, economic-financial and

health, safety and environment aspects.

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 51

SOCIAL SECURITY

AND OTHER BENEFITS

In Brazil Petrobras offers complementary pension

schemes to provide security and quality of life to all

its employees and their next of kin during their work-

ing years and on retirement.

The Petrobras System Petros Plan has been

closed to new participants since August 2002. For

employees recruited since that date and for those who

were not yet participants the Petros Plan 2 was off ered

in July 2007 and over 92% are now members.

The Petrobras System Petros Plan supplements

social security benefits: retirements, death benefit,

social security and accident allowance and confi ne-

ment allowance; death allowance and annual bonus

(13th wage).

Another employee benefi t is the complement of

the Disability Compensation, assuring the employee

who is off work because of an occupational accident

full pay for the fi rst four years, or because of an occu-

pational disease for the fi rst three years of absence.

Employees who are members of the Petros or Petros

2 plans have this complement guaranteed after these

terms and for an indeterminate period.

Petrobras offers Day Care Allowance or

Companion-Allowance to parents with children 36

months old or under. The School Allowance also

exists for the same purpose. It includes the Pre-

School Assistance Program that reimburses 90% of the

expenses, Primary School Allowance that reimburses

75% and Secondary School Allowance that reimburses

70% of the expenses, all restricted to regional ceil-

ings. If the pupil is registered in a public school, the

Company reimburses the expenses for school material

TURNOVER RATE – PETROBRAS SYSTEM

Men 3.50%

Women 0.81%

Excludes the international area

Dental treatment in the

Torre Almirante building

(Edita) in Rio de Janeiro

LABOR52

PAY AND BENEFITS

and uniform every six months.

Employees can also use the Educational

Complementation Program, which offers oppor-

tunities for career growth to middle-level profes-

sionals. Petrobras uses this program to pay for 90%

of the basic education and 80% for complementary

technical courses.

All employees are entitled to the AMS health

plan, dental plan, meal or restaurant tickets and travel

vouchers. The Company also requests contractors to

off er the same class of benefi ts to their workers.

In Brazil, the benefits are not reduced accord-

ing to the working hours. The only variable benefi t

is the travel voucher: in the administrative system

it is given according to the number of working days

in the month; and in a rota system, according to the

days actually worked.

Some benefits in the international units in

Argentina, Colombia, Mexico, Paraguay, USA and

Venezuela — such as medical and dental care, life

insurance, medication, luncheon vouchers and reim-

bursement of educational expenses — are off ered only

to full-time employees.

PEOPLE DEVELOPMENT

Each year employees are appraised in terms of

their work development through the Performance

Management (PM). This is when the manager and

employee can refl ect on the work done and results

achieved, and set targets based on individual and

collective skills. Through the results, the possibil-

ity of an advance in level or promotion is assessed,

essential for growth within the Company. PM also

analyzes the need for capacity building, a necessary

premise for the employee to be able to acquire and

practice new knowledge.

Right from the start of the Company quality edu-

cation has been one of its mainstays. Today Petrobras

University is the synthesis of the Company’s past com-

mitment to its professional personnel development.

Petrobras University consists of four schools of

sciences and technologies (Exploration & Production;

Supply; Engineering; Gas & Power), a business and

management school and a technical college. It devel-

ops educational solutions for training and ongoing

education courses, providing the know-how required

throughout the Petrobras System.

AVERAGE HOURS OF TRAINING IN 2007

COMPANY TOTAL PERSONNEL HHT AVERAGE HHT

Petrobras Holding 50,207 5,004,968 99,69

Petrobras Distribuidora 3,608 43,394 12,03

Liquigás 3,298 78,886 23,92

Transpetro 4,144 319,088 77,00

Petroquisa 103 175,72 1,71

Total System 61,360 5,446,512 88,76

AVERAGE HOURS OF TRAINING IN 2007 – EMPLOYEE WITH NO-BONUS OCCUPATION

COMPANY NO. EMPLOYEES HHT AVERAGE HHT

Petrobras Holding 43,755 4,598,645 105,10

Petrobras Distribuidora 3,145 33,023 10,50

Liquigás 3,049 72,990 23,94

Total System 49,949 4,704,658 94,19

AVERAGE HOURS OF TRAINING IN 2007 – EMPLOYEE WITH BONUS OCCUPATION

COMPANY NO. EMPLOYEES HHT AVERAGE HHT

Petrobras Holding 6452 406,323 62,98

Petrobras Distribuidora 463 10,371 22,40

Liquigás 249 5,896 23,68

Total System 7,164 422,590 58,99

Petrobras University

awarded the Corporate

University Best in

Class 2007 prize

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 53

Every Petrobras employee has an HR Develop-

ment Plan, which enables them to participate in

events at home and abroad according to their profes-

sional needs and strategic objective of the Company.

The ongoing education process includes provid-

ing lato sensu post-graduation, Master’s and PhD

courses in various fi elds of knowledge. The Petrobras

Formation Program for new employees was win-

ner of Educare — National Prize for Excellence in

Education in 2007 and twice fi nalist of the Petroleum

Economist Awards in the category “Best Youth

Educational Program in the Energy Industry”.

In 2007, Petrobras University was nominated

the world’s top corporate university when it won the

Corporate University Best in Class 2007 — Cubic

Awards, the annual prize awarded by the International

Quality & Productivity Center (IQPC). Between 2005

and 2007 the Company earned maximum ratings

(100 points) successively in the item Human Capital

Development in the Dow Jones Sustainability Index,

in recognition as an international benchmark.

In Brazil, Petrobras and its subsidiaries adopt the

Retirement Preparation Program (PPA) to help the

employee make a free and conscious decision to retire.

The program encourages refl ection about the diff er-

ent psychosocial, pension, legal and fi nancial aspects

involving retirement. The PPA has a basic structure, but

some Units have adapted it to specifi c local aspects,

introducing a before and after-retirement follow-up

or by encouraging entrepreneurialism.

ORGANIZATIONAL AMBIENCE

The Organizational Ambience Research is done every

year to know the employees’ opinion about diff erent

aspects. Through it, employees can express their opin-

ions and expectations about the Company, collabo-

rating to improve working conditions and Company-

employee relations.

AMBIENCE STUDY PERFORMANCE

2004 2005 2006 2007

* Now measured for the first time in 2007.

ESI

LCC

LCSR*

78%

68

%

66

% 77

%

68

% 78%

69

% 77

% 81%

Three indicators for the Petrobras Strategic Map

were the outcome of the Ambience Study: the Employee

Satisfaction Index (ESI), Level of Commitment to the

Company (LCC) and Level of Commitment to Social

Responsibility (LCSR), which measures how employ-

ees assess and participate in the Company’s socially

responsible actions.

In the 2007 survey of the Petrobras Holding, the ESI

rose to 69 points from 68 in 2006. LCC dropped from

78 to 77 points. Included for the fi rst time in the survey,

the Level of Commitment to Social Responsibility was

81%, which is a high level of employees engaged in the

topic and that approve the role of Petrobras.

54 LABOR

Principle 3 — Businesses should uphold the freedom of association and the eff ective recognition of the

right to collective bargaining

Freedom of association

DIALOGUE WITH TRADE

UNION REPRESENTATIVES

In 2007 there were no cases of violation of freedom

of association and collective bargaining practice. In

accordance with Petrobras System code of ethics, the

Company agrees “to recognize the right of free asso-

ciation of its employees, respect and valorize their

participation in trade unions and not to practice any

kind of negative discrimination in relation to its union

member employees”. It also agrees “to seek ongoing

reconciliation of interests and practice rights through

institutional negotiation channels in its relationship

with the unions that represent the employees”.

Accordingly, in the relationship with its stake-

holders, Petrobras considers the unions to be priority.

Through them the employees’ claims are examined

and accepted, when approved.

The collective labor agreement covers 100%

of Company employees and is signed between the

Petrobras Holding, its subsidiaries, FUP and the unions

for each category. There is constant dialogue between

I

o

a

C

c

the stakeholders, maintaining an ongoing bargaining

process for building solutions with the employees’

union representatives

In Argentina, 40% of employees are protected by

collective bargaining agreements. In Paraguay this

proportion is 31%. By the laws in Colombia, Libya,

Mexico, Nigeria, Peru, Turkey, USA and Venezuela

employees cannot be union members.

In Brazil, after various stages of bargaining,

the 2007 Labor Collective Agreement was signed

between Petrobras, FUP and nine trade unions. With

a two-year term for social and one year for economic

clauses, the new ACT has 132 clauses and involves

such aspects as working conditions, wages, bonuses,

PLR, risk, vacations, overtime, disability compen-

sation, adapted employee allowance, AMS, occu-

pational accident, cost of medication and benefi ts

such as daycare/companion allowance and school

allowance (preschool, primary and secondary).

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 55

In event of major operating changes that might

affect the employee’s work, Petrobras provides

formal advance notice using the available in-Com-

pany communication media. In event of operation

downtime the notice is given 72 hours in advance.

However, changes are previously informed and

negotiated with the employees. The most signifi cant

changes and with major impact are informed after

a management process with gradual implementa-

tion of change, seeking to sensitize and prepare the

employees for the new reality.

ACT 2007 also provides that, in event of surplus

personnel as a result of restructuring or downsizing,

the Company assures relocation of employees to

other Units and, if necessary, off er further training.

In May, during negotiations of the Job Assessment

and Rating Plan (PCAC), workers were mobilized to meet

their claims. There was no downtime in production and

mobilization consisted basically of a shift delay.

The Collective Labor Agreement involvesall Company employees in Brazil

Company recognition of

its employees’ right to

freedom of association

56 LABOR

COMBAT AGAINST SLAVE

OR DEGRADING LABOR

Petrobras formally rejects slave or degrading labor.

This is why it signed the National Pact for Eradication

of Slave Labor since its start in 2005. The initiative

was organized by Ethos Institute, Reporter Brasil and

the International Labor Organization. The Company

acts jointly with other institutions and companies to

combat this kind of practice.

The Petrobras policy of social responsibility

approved in 2007 makes specifi c reference to the topic:

“Labor Principles: to uphold the eradication of child,

slave and degrading labor in the Petrobras System pro-

duction chain”. The concept of social responsibility

associated with this policy also does not permit degrad-

ing, child or slave labor.

In accordance with its code of ethics, the Company

agrees “to select and contract suppliers and service pro-

viders on the basis of strictly legal and technical criteria

of quality, cost and punctuality, and requires an ethical

profi le in its management and social and environmen-

Petrobra

This is wh

of Slave

w

t

Rejection of forced labor

Princípio 4 — Businesses should uphold the elimination of all forms of forced

or compulsory labor

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 57

tal responsibility practices, refusing practices of unfair

competition, child labor, a compulsory workforce and

other practices contrary to the principles of this code,

including in the production chain of such suppliers”.

There is no case of forced or slave-like labor in the

operating or administrative activities of the Petrobras

System. However, to prevent such practices in its sup-

plier chain, the Company adopts ethical, legal and

human rights criteria when selecting and contracting

suppliers. All contracts for procurement of goods or

services have clauses banning child, forced or degrading

labor. Should such practices be discovered the contract

is cancelled immediately.

In recent years, due to the growing demand of

national and international markets, there has been a

sharp rise in the number of ethanol suppliers. As a result,

Petrobras Distribuidora has intensifi ed its assessment of

ethanol procurement contracts to prevent any possibil-

ity of a degrading labor situation in sugarcane planta-

tions. Petrobras Distribuidora regularly performs sur-

veys with the register of employers and people charged

for slave labor exploration, also called a “black list”

of the Ministry of Labor and Employment (MTE), to

appraise suppliers in terms of labor relations.

In July 2007, Petrobras Distribuidora found out that

the company Pagrisa — based in Pará State — was caught

red-handed by the Mobile Anti-Slave Labor Group of the

land reform movement of MTE, which is why any spot

procurement was immediately suspended.

In December, the company Agropecuária e

Industrial Serra Grande (Agroserra), another supplier of

Petrobras Distribuidora, was also black-listed. However,

the Brazilian judiciary granted an injunction that forced

MTE to remove it from the black list. Petrobras is follow-

ing the case at the Ministry of Labor and Employment

and awaiting the fi nal decision.

There is no case of forced or slave-like labor in Petrobras System administration or operations

58 LABOR

Guaranteeing the rights of the child

and adolescentSTEPS TAKEN AGAINST

CHILD EXPLOITATION

The Company rejects the use of child labor in its

facilities and supplier chain. In 2007, no operations

were found with a signifi cant risk of child labor in the

Petrobras System.

Each year the Company transfers funds in sup-

port of the Childhood and Adolescence Fund (FIA),

which was created to raise funds for adopting policies,

actions and programs to protect children and adoles-

cents. The resources are preferably invested in projects

that protect the rights of children and adolescents in a

situation of social or personal risk, that combat child

labor, provide youth professional training support and

give guidance and social-family support.

In 2007, Petrobras transferred R$ 43.2 million to

the National Council of the Rights of the Child and

Adolescent (Conanda) and to FIA in 19 states and

176 counties in Brazil. The transferred resources are

deducted from income tax and the value is restricted

to 1% of the tax due that year.

The Com

facili

were

Petro

E

Principle 5 — Businesses should uphold the eff ective abolition of child labor

In September 2007 the Company also created the

FIA Committee, a jurisdiction that analyzes proposals

and decides on the allocation of 50% of the funds. The

remaining 50% is given to Conanda, and 25% of this

amount goes to councils in Petrobras regions of infl u-

ence. This committee consists of two Petrobras rep-

resentatives and six representatives from public and

civil society institutions: UNICEF; Conanda; Abrinq

Foundation; Center of References, Studies and Actions

for Children and Adolescents (Cecria); Andi and the

World Childhood Foundation (WCF).

In the scope of its social investments, priority is

given to the protection of children and adolescents.

Such actions include renewing the partnership with

the United Nations Children’s Fund (UNICEF) and

support to the national pact for A Better World for

the Child and Adolescent in Semi-Arid Brazil, signed

in April 2005 by the federal government, the states in

the semi-arid region, Petrobras and non-governmental

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 59

organizations. The pact is the result of a UNICEF proj-

ect to collaborate to reduce poverty and inequalities

in Brazil and achieve the Millennium Development

Goals (MDGs). The semi-arid region in Brazil is one

of the most populated and dry regions in the world,

covering most of the states in Northeast Brazil. More

than 27 million people live there, of which around 13

million are children and adolescents between 0 and

17 years old, 75% of which are poor.

The A Better World for the Child and Adolescent

in Semi-Arid Brazil pact includes UN-defi ned targets

based on the Millennium Development Goals (MDGs),

which Brazilian local governments should achieve

by 2015. Special mention is given to eradicating the

abject poverty and hunger, drop in infant mortality and

access to basic and primary education. The strategies

required to achieve the targets of the pact are adopted

through a national committee of UNICEF, Petrobras,

federal and state government representatives and

other partners in civil society.

Since 2003 the Company has been sponsoring

the On the Right Road (Siga Bem Criança) included

in the On the Right Road, Truck Driver (Siga Bem

Caminhoneiro) project and Dial 100 of the federal

government’s Special Human Rights Secretariat to

mobilize society against the most perverse form

of child labor: sexual exploitation of children and

adolescents.

The On the Right Road project promotes the

Statutes of the Child and Adolescent by disseminat-

ing Dial 100, a direct dialing toll-free service for accu-

sations of violence against children and adolescents.

The service also accepts accusations giving informa-

tion about the whereabouts of missing children and

adolescents and instructs the users on how to proceed

in cases of disappearance.

As an extension, Petrobras runs campaigns in the

service station chain and radio and television pro-

grams to encourage truck drivers and drivers in gen-

eral to denounce cases of sexual abuse and violence

against children and adolescents on Brazilian roads

and highways. According to the report by the Special

Human Rights Secretariat, the average number of

accusations has been on the rise every year. In 2007,

67 accusations were registered each day.

The Company is also one of the partners in the

News Agency for Children’s Rights (Andi). The Andi

network recognizes communication professionals

who work in the news desks of newspapers, maga-

zines, portals, radio and TV broadcasting stations,

and in NGOs and other organizations of the third

sector, whose work is based on commitment to the

social agenda and the rights of the child and adoles-

cent. Petrobras is one of the sponsors of the Child’s

Friendly Journalist project, which each year awards

journalists who were most outstanding on this topic.

YOUTH AND ADOLESCENT

CAPACITY BUILDING

In 2007, Petrobras invested around R$ 26 million in

professional training of 2,447 young people between

15 and 17 years old through the Petrobras Young

Apprentice Program. The program evidences the con-

cern of the Petrobras System to meet all the require-

ments provided by Law 10,097 dated September 19,

2000, regulated by Decree 5,598 dated December 1,

2005. The purpose of the Petrobras Young Apprentice

Program is the professional development and social

inclusion of young people who are in a vulnerable

socio-economic situation. The program’s strategies

are personal and professional qualifi cation for inclu-

sion in the labor market by developing communica-

tion and written skills, for example.

The work projects undertaken are: qualifying the

young for the working world; teaching the young to

face the market knowing their labor and social rights;

health and safety; access to education, citizenship

and full practice of rights, with information on qual-

ity of life, environment, gender and ethnic issues and

human rights.

The program accompanies the output of the

young people in basic education, by integrating them

in the local education system and furthers educational

actions to collaborate with the culture of social respon-

sibility, entrepreneurial capacity, critical, investigative

thinking, and a conscience of solidarity.

One of the selection criteria is to seek a balance

between gender, race, ethnic groups, young people

with disabilities, others who live in vulnerable social

places, and prioritizing the young who fulfill socio-

educational measures that do not restrict freedom.

TRANSFERS TO FIA (R$ MILLION)

YEAR 2005 2006 2007

Transfer 40.8 48.6 43.2

The Company invested

26 millionreais in professional training of 255 young people in the 15-17 age group through the Petrobras Young Apprentice Program

60 LABOR

Combat against prejudice and discrimination

ACTIONS FOCUSING

ON DIFFERENT GROUPS

Petrobras promotes in its workforce a culture of

respect for values, ethnic groups and creeds of indi-

viduals, encouraging personal and professional

development.

It agrees, in its code of ethics, to “respect and pro-

mote diversity and combat all forms of discrimina-

tion by means of the transparent policy of recruitment,

training, career promotion, moving up the ladder and

dismissal. No employee or potential employee will be

treated with discrimination because of race, skin color,

ethnic origin, nationality, sexual position, personal

appearance, physical, mental or psychic condition,

marital status, opinion, political conviction or any

other factor of individual diff erentiation”.

Moreover, the Diversity topic is stressed in the

social responsibility policy, in which the Company

agrees to “respect human and cultural diversity of its

workforce and of the countries where it operates”.

The Diversity Committee was created by the

Petrobra

respect fo

viduals,

d

Princípio 6 — Businesses should uphold the elimination of discrimination in

respect of employment and occupation

Management Committee for Social Responsibility

in 2006, and it proposes to discuss and prepare

related issues. The committee is coordinated by

the Ombudsman’s office and includes representa-

tives from 13 areas in the Company, as well as from

Petrobras Distribuidora, Transpetro and Petros.

One of the committee’s major achievements was

the recognition of the union of couples of the same

gender. Since 2007, they all are entitled to include

their partners as dependents in the Multidisciplinary

Health Care (further information in page 65).

To comply with the code of ethics, which forbids

any practice of discrimination, Petrobras maintains

the Ombudsman’s office as a special channel to

receive denouncements. As a channel for any kind

of complaint, the Ombudsman’s office can receive

accusations of discrimination, forwarding them to

be addressed by the relevant areas. From 2008 on, the

computerized system for dealing with complaints will

consider the Discrimination category, divided in the

following issues: race; religion; gender; customs; sex-

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 61

ual orientation; union membership; freedom of asso-

ciation; ethnic origin; skin color; nationality; social

position; personal appearance; physical, mental or

psychic condition; marital status; opinion; political

conviction; and occupation of jobs and duties.

In 2007, the Company received an accusation of

sexual harassment on platform P-33 in the Campos

Basin Business Unit (UN-BC). An administrative

assistant, contracted by a service provider, informed

that she had been harassed by her boss, also recruited

by the same company. Petrobras set up a disciplin-

ary committee to investigate the accusation which

resulted in a request to the outsourcee company

to remove the professional involved in the UN-BC

operations and the return of the assistant to the out-

sourcee personnel.

In-company registrations were also made of

another 26 accusations in Exploration & Production

Business Units. The claims were examined and solu-

tions sent to the managers in charge, resulting in rec-

onciliation between the parties and, in some cases, a

PROPORTION OF BASIC WAGE BETWEEN MEN AND WOMEN

TYPE OF EMPLOYEE MIDDLE LEVEL PROPORTION

FEMALE MALE

Employee with no-bonus occupation 51% 49%

Employee with bonus occupation 50% 50%

Total 50% 50%

TYPE OF EMPLOYEE TOP LEVEL PROPORTION

FEMALE MALE

Employee with no-bonus occupation 46% 54%

Employee with bonus occupation 48% 52%

Total 47% 53%

* The above table gives the distribution of the basic wage (fixed value and minimum paid to the employee for perform-

ing his or her tasks, not including any extra pay) between men and women in the Petrobras System, detailed by employ-

ees with and without bonus occupation, separated by the educational level of their occupations.

The Petrobras code

of ethics condemns

discrimination

62

COMBAT AGAINST PREJUDICE AND DISCRIMINATION

warning and suspension for the perpetrator. Petrobras

not only has the Ombudsman’s offi ce for communi-

cating such facts but also a channel for an outsourcee

ombudsman in UN-BA.

EQUALITY IN CORPORATE

MANAGEMENT

The number of women among the total 68,931

employees in the Petrobras System is 10,722, or

15.5%. There has been an increasing number of

female employees since 2003. That year, the Petrobras

Holding had 4,406 female employees, correspond-

ing to 12% of the entire personnel. The proportion of

women today who occupy senior positions in Brazil

is 13.5%.

The number of female employees outside Brazil is

even more signifi cant. In 2007, there were 1,837 — or

27.08% - female employees of the total 6,783 business

unit employees abroad.

The chair of the board of directors is occupied

by a woman, minister Dilma Roussef. In 2007, for the

very fi rst time in Petrobras, a woman was appointed to

a seat on the executive board.

The Company implemented for the second year

the For Gender Equality Program, run by the fed-

eral government’s Secretariat for Women’s Special

Policies. The purpose is to further equal opportunities

between men and women in companies and institu-

tions, including when occupying higher positions in

the hierarchy and developing new concepts in people

management and organizational culture.

From the successful actions, Petrobras was again

awarded the For Gender Equality Seal 2007. One of

the projects worth mentioning is Women on the Right

Road, which seeks to raise the question of violence

against women among truck driver groups and inform

them about the current Brazilian laws against domes-

tic and family violence.

Two other successful actions were the publication

of the book As Mulheres e a Petrobras, [Women and

The proportion of women in the workforce increased from 12% in 2003 to

15.5% in 2007

LABOR | PRINCIPLE 6

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 63

NUMBER OF EMPLOYEES BY GENDER*

58,209Men

10,722Women

* Includes the international area

PETROBRAS SYSTEM

3,991Up to 25

8,24226 - 30

6,44631 - 35

5,82636 - 40

11,57041 - 45

13,47746 - 50

9,40451 - 55

2,49656 - 60

69661 and over

NUMBER OF EMPLOYEES - BY AGE GROUP*

* Only in Brazil

Petrobras], a series of photographs of the female work-

force, portraying around 150 women; and the support

for the campaign of the Sixteen Days of Activism for

the End of Violence against Women. The show Por

uma vida sem violência [For a life without violence] was

held in Rio de Janeiro, with the voluntary participation

of over 40 artistes — musicians, actors, writers — and

a public of around 1,500 people.

Law 10,098 of 2000 and Decree 3,298 of 1999

provide that every Company with over a hundred

employees is obliged to allocate 5% of its vacancies

to people with disability. The total 68,931 employees

in the Petrobras System include 6,783 employees out-

side Brazil not subject to Brazilian laws. The remain-

ing 15,767 occupy positions in which the vacancies

are reserved and 1,026 of these employees are people

with disability, corresponding to 6.5% of personnel in

that condition.

The next programmed actions include the House

Census, which has been planned and its methodology

developed since 2007. Data collection and analysis of

the results will be provided in 2008.

In addition to the work to encourage diversity

focusing on the internal public, the Company supports

and sponsors external projects in partnership with

companies, public institutions or non-governmental

organizations, focusing on specifi c publics, such as

African descendents, women, indigenous populations,

and people with disability.

Pr

inc

iple

6

TURNOVER RATE BY AGE GROUP

AGE MALE FEMALE TOTAL

Under 30 1.94% 0.54% 2.48%

30 -45 1.07% 0.20% 1.27%

45 -60 0.46% 0.07% 0.53%

Over 60 0.03% 0.00% 0.03%

Total 3.50% 0.81% 4.31%

The turnover rates per region were not consolidated.

64 LABOR

Stable same-sex union

CASE STUDY LABOR

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 65

Comunidade visitada

pelos pesquisadores

do Projeto PIATAM, na

Amazônia

From July 2007, the Petrobras Multidisciplinary

Health Care Program (AMS) covers employees who

have a stable union with partners of the same sex. In

compliance with the same criteria adopted for hetero-

sexual couples, the inclusion is pursuant to the Human

Resources Corporate Policy and committed to respect

the diversity assumed in the code of ethics.

The initiative was take n b y the Human

Resources area in partnership with Institutional

Communication and the Ombudsman’s office,

through the Diversity committee. In line with the

constitutional principles of equality, dignity and

non-discrimination, the stable same-sex union

is included in the Company’s strategy of social

responsibility. The immediate outcome was the

request by 46 employees to register their partners.

In September that same year, Petros Plan, the

pension fund for Petrobras employees, accepted

same-sex partners for granting social security ben-

efi ts. When INSS, which has been acknowledging

such unions, grants the pension on the partner’s

death, Petros — the second largest supplementary

pension plan in Brazil — pays the supplement ben-

efi t corresponding to the registered partners.

This practice refl ects a new trend by the offi cial

social security body, which has standardized health

plan benefits to the public servant, and extended

acceptance to same-sex partners. Moreover, the

Judiciary tends increasingly to recognize evidence that

there is a family nature or stable union in this type of

relationship, and some Brazilian states and counties

now have specifi c regulations on this matter.

Although the 1988 Federal Constitution does

not consider recognition of these partnerships, sev-

eral courts of justice are coming to an understand-

ing and making major advances to acknowledge

such unions.

Greater acceptance by the organized civil soci-

ety of same-sex unions leads the courts of justice to

understand that they have moved from just social

discussion to the territory of private relationships.

With its recognition, the Company is in line

with state and local governments, and public and

private organizations at home and abroad that adopt

similar models to guarantee equal rights to same-

sex partners. In this way, Petrobras widens its hori-

zons and adapts to the principles of equality and

non-discrimination of the Universal Declaration of

Human Rights and the UN Global Compact.

From Ju

H

have a

c

s

Recognition mirrors the commitment to diversity in the code of ethics

ENVIRONMENT | WWW.PETROBRAS.COM.BR66

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 67

Petrobras environmental actions have received R$ 1.976 billion in Petrobras environmental actions have received R$ 1.976 billion in investment in 2007. Some of the highlights are monitoring ecosystems, investment in 2007. Some of the highlights are monitoring ecosystems, rehabilitating impacted areas and the management of natural resources, air rehabilitating impacted areas and the management of natural resources, air emissions, effluents, waste and emergency preparedness. The Company emissions, effluents, waste and emergency preparedness. The Company target, in line with the challenge to contribute to mitigating global climate target, in line with the challenge to contribute to mitigating global climate change, is to prevent emission of 21.3 million tons of COchange, is to prevent emission of 21.3 million tons of CO2 equivalent equivalent between 2007 and 2012. Its share in the biofuel segment will increase in between 2007 and 2012. Its share in the biofuel segment will increase in accordance with its 2020 Strategic Plan.accordance with its 2020 Strategic Plan.

Environment

68 ENVIRONMENT

INVESTMENTS IN ENVIRONMENT

In 2007, Petrobras invested R$ 1.976 billion in

environmental aspects of its operating processes,

including upgrading air emission management,

reducing contaminants in effl uents, and water and

energy consumption management, for example.

Other highlights included improving quality and

development of new products, such as biofuels and

alternative energy sources, in addition to invest-

ments in research and technology to enhance envi-

ronmental performance of processes and products.

An investment of R$ 51.7 million was also made

during the year in sponsorships for environmental

programs and projects.

ENVIRONMENTAL

AND TECHNOLOGICAL

DEVELOPMENT

In 2007 Petrobras became a member of the World

Business Council for Sustainable Development

(WBCSD), an international business initiative focusing

on sustainable development. This is in line with its striv-

ing for excellence in Health, Safety and Environment

(HSE) in its operations and areas of infl uence.

I

e

i

r

e

Performance on Health, Safety and

Environment

TOTAL EXPENDITURE AND INVESTMENTS IN ENVIRONMENT

DESCRIPTION R$ ‘000

Environmental expenses relating to Company production/operation 1,632,576

Expenses with rehabilitation projects of degraded areas, reforestation, etc. 233,103

Expenses with pollution control equipment and systems 59,019

Sponsorships 51,728

Total 1,976,426

Principle 7 — Businesses should support a precautionary approach

to environmental challenges

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 69

The HSE Management Committee was created

in 2002 consisting of nine executive managers from

diff erent areas in the holding Company, one director

from Petrobras Distribuidora and an executive man-

ager from Transpetro. Some of its tasks are to advise

the senior administration when defi ning and updating

the HSE policy in line with strategies; to critically ana-

lyze HSE performance; to defi ne instructions for con-

ducting operations; establish and continue updating

HSE management-related strategies; to promote use

of HSE indicators and follow up their results in con-

junction with the units. The committee also proposes

upgrade actions in the area, submitted to the Business

Committee and later to the Executive Board.

In many cases, Petrobras actions exceed legal pre-

vention measures. The concepts of the Principle of

Precaution are adopted in environmental impact and

risk assessments for new projects or when making

changes to existing facilities.

Company projects in their concept stage include

risk analysis. In the undertakings Environmental

Impact Assessments and Reports on Environmental

Impacts (EIA/Rima) are made. Construction and

assembly stages include surveys of aspects and assess-

ment of environmental impacts and hazards, dam-

ages and risk assessment, covering impacts on health,

property and the environment.

The ten Environmental Protection Centers

(CDAs) complement the local contingency plans

in operational units. For fast action in emergencies,

13 advanced CDA bases and three vessels are dedi-

cated to combating emergencies in Rio de Janeiro

(Guanabara Bay), São Paulo and off the coast of

Sergipe and Alagoas.

When addressing management challenges, the

2020 Strategic Plan includes technology as one of

the key points of new strategic projects. In this way it

strives to be a global benchmark in technologies that

contribute to the sustainable growth of Petrobras in oil,

natural gas, petrochemical and biofuel industries.

Leopoldo Americo Miguez de Mello Research

and Development Center (Cenpes) is adding a further

190,000 square meters to its area. The work is expected

to be completed by early 2010. Cenpes will include 227

research laboratories, 90 more than the current facili-

ties, with emphasis on biotechnology, environment

and natural gas, and renewable energies.

Research and development (R&D) investments

HSE Guidelines · 1 · Leadership and Responsibility · 2 · Legal Conformity· 3 · Risk Assessment and Management · 4 · New Projects· 5 · Operation and Maintenance · 6 · Change Management · 7 · Procurement of Goods and Services · 8 · Capacity Building, Education and Consciousness · 9 · Information Management · 10 · Communication · 11 · Contingency · 12 · Community Relations · 13 · Accident and Incident Analysis · 14 · Product Management · 15 · Ongoing Improvement Process

70

ACTION IN HEALTH, SAFETY AND ENVIRONMENT

ENVIRONMENT | PRINCIPLE 7

were R$ 1.71 billion, 8% up from the R$1.58 billion

invested in 2006. Highpoints are also partnerships

with universities and Brazilian research institutes

to undertake R&D work. By 2008, 45 cooperation

agreements in Brazil will be signed to implement 38

thematic networks and seven regional centers.

Petrobras will invest R$ 793.5 million to imple-

ment this new partnership system in 71 institutions

in 19 Brazilian states between 2006 and 2008. In 2007

it invested R$ 203.6 million. As provided in the regu-

lations of the Brazilian Oil, Natural Gas and Biofuel

Agency (ANP), a clause in the concession contracts

for oil and gas production states that 0.5% of the

Company’s gross revenue is to be invested in R&D

work with Brazilian universities and research centers.

In August the Company was awarded by the

Brazilian Institute of Industrial Property (Inpi) for

the thousandth request deposited for a patent — a

manufacturing breakthrough in processing ethanol

from vegetable waste. Petrobras deposits an average

of 80 patent requests a year.

The 2007 Inventor Prize was awarded to 190

researchers for 77 new patents in recognition of

the creativity and innovative capacity of Petrobras

employees and in conformity to the laws regulating

industrial property in Brazil. Since its creation in 2001,

460 patents have been awarded for privilege petitions

deposited since 1998. The Petrobras Technology

Prize, also, encourages talent-spotting and ground-

breaking work of interest to the oil, gas and energy

segment. In its third year 25 works from 16 institu-

tions were awarded prizes. Overall, 421 works have

been registered from 90 learning and research insti-

tutions. The most recurring topics are environmental

preservation and energy. R&D

investments of

1.71 billion

reais, 8% more than in 2006

HSE team in training

using new oil contention

and collection equipment

in Campos Basin

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 71

Bu

sin

ess

es

sho

uld

su

pp

ort

a p

reca

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on

ary

app

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h to

en

vir

on

men

tal c

hal

len

ges

Pr

inc

iple

7

STRATEGIC MANAGEMENT

CHALLENGE

The 2020 Strategic Plan, considering the 2020 busi-

ness outlook, emphasizes climate change and envi-

ronmental pressures. One of the defi ned management

challenges is to achieve excellence in the energy sector

with fewer greenhouse gas emissions in the processes

and products, contributing to sustainability of busi-

ness and mitigating global climate change.

The Technology Program for Mitigating Climate

Change (Proclima) was created to provide techno-

logical solutions to reduce the effect of Company

operations and products on global climate change.

The program focuses on assessing environmental per-

formance in the life cycle of fossil and renewable fuels,

energy effi ciency, carbon sequestration and impact

assessment, vulnerability and adaptation of Petrobras

activities to climate change.

The Company specialists are members of the

research team that prepared the report for the

Intergovernmental Panel on Climate Change (IPCC),

the agency that shared the 2007 Nobel Peace Prize with

former US vice-president Al Gore. The prize is in rec-

ognition of the importance of disclosing information

about climate change and the measures to be taken for

its mitigation. The IPCC membership includes around

2,500 scientists worldwide who discuss, compile and

disseminate studies on the topic.

Petrobras employees were commended for their

participation in the special report “CO2 Capture, Storage

and Sequestration”. This report addresses the green-

house effect and includes information about carbon

dioxide, for example: survey on emissions; specifi c cap-

ture techniques; transportation and storage in ocean

geological formations, mineralization or in industrial

processes. Carbon sequestration is also analyzed in eco-

nomic and legal terms.

In August a series of studies began in partner-

ship with the Foundation for Coordination of Projects,

Research and Technological Studies (Coppetec) linked

to the Federal University of Rio de Janeiro on threats and

opportunities in the oil and gas sector relating to global

The 2020

ness

ronm

chall

with

Climatechange

72

CLIMATE CHANGE

climate change. The Company should take the pro-

posed actions against carbon risk. The 28-month project

assesses various policies that are in progress in the world,

or may possibly be adopted by a number of countries in

short and mid terms, in addition to analyzing its possible

impacts on petroleum and byproduct prices.

In December the 13th Conference of the Parties

(COP-130 on the Framework Convention on Climate

Change and the 3rd Meeting of the Parties of the

Kyoto Protocol (CMP-3) were held in Bali, Indonesia.

On this occasion, negotiations were established for

the future of the Kyoto Protocol after 2012. Petrobras

accompanied the negotiations and parallel events.

Investments in developing carbon capture technologies and in mitigating climate change will be

14 million reais between 2006 and 2008

The Company sponsored the 1st Brazilian

Symposium on Global Environmental Change on March

11 and 12 in Rio de Janeiro, with 22 talks on four topics:

Climate change and variations and its impacts on Brazil;

Climate change and biodiversity; Global bio-geochemi-

cal cycles and climate; and Human dimensions of global

change in environment. Petrobras also supported the 1st

Brazilian Seminar on Carbon Sequestration and Climate

Change, in April in Rio Grande do Norte.

A s p a r t o f t h e a c t i v i t i e s o f In te r n a t i o n a l

Environment Day, the Company held a discussion on

the topic “Energy and global warming — challenges in

search of sustainability” in its headquarters.

REDUCING INTENSITY OF

EMISSIONS AND CARBON

SEQUESTRATION

In its Business Plan Petrobras defi nes its targets for

total prevented emissions of greenhouse gases. By 2012

the total forecast is 21.3 million tons of CO2 equivalent

of prevented emissions.

The Company intends to invest around R$ 14 mil-

lion between 2006 and 2008 in the Thematic Climate

Change Network to develop carbon sequestration

technologies and attenuate climate change by iden-

tifying possible environmental impacts for Petrobras

in Brazil. The investment in 2007 was R$ 6.3 million.

The Network, including prominent research insti-

tutes and universities, undertakes projects divided

into 11 topics, including economic assessment of

carbon sequestration processes and socioeconomic

and environmental impacts.

ENVIRONMENT | PRINCIPLE 7

Carbon sequestration may occur directly with a

process involving separation of the CO2 from exhaust

gases, capture, transportation and storage in under-

ground geological reservoirs, or indirectly using car-

bon fi xed in biomass using reforestation and planting

vegetation.

In May Petrobras attended the Carbon Seques-

tration Leadership Forum in Pittsburgh organized

by the US Energy Department. The purpose of the

forum was to encourage emerging countries to imple-

ment carbon capture and storage technologies, and to

exchange learning and good practices. Representatives

from Brazil, China, Colombia, India, Mexico and South

Africa participated.

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 73

CERTIFICATIONS AND

OPERATING LICENSES

At the end of the year, 183 of the 227 certifi able units

in Brazil (88% of the total) and 20 in other coun-

tries (100% altogether) were certified by Brazilian

and international organizations in accordance with

standards ISO 14001 (Environment) and BS 8800

or OHSAS 18001 (Safety and Health). Moreover, the

Management Assessment Program, responsible for

measuring Petrobras HSE practices, was active in 40

operating units in Argentina, Brazil, Ecuador, Peru and

the USA during 2007.

All units operated under license from the envi-

ronmental agencies or under specifi c agreements —

Conduct Adjustment Agreements (TAC). In these

cases, the Company guarantees full compliance with

the obligations provided.

In order to achieve excellence in the licensing

process, Petrobras continued to implement the

Environmental Licensing Management Standard

and Quality Guarantee Standard of Environmental

At the e

in Brazil

tries (100

and interna

ards I

Mapping, monitoring and reducing impacts

All units operate under license from environmental agencies or specifi c agreements, such as the Conduct Adjustment Agreement (TAC)

Bu

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7

74

MAPPING, MONITORING AND REDUCING IMPACTS

Studies. The former provides uniform management

practices throughout the Company, assuring greater

control of its processes, considering accumulated

experience in its various licensed projects. The latter

seeks to enhance procedures for contracting studies

and ongoing supervision of the work done, based on

model-processes for Petrobras and environmental

agencies.

In 2007 the Company began reformulating two

information systems to provide critical analysis of

all environmental licensing processes by monitoring

recorded information, helping to control and fulfi ll all

environmental licensing stages.

In relation to environmental compensation

under Law 9985/2000, which instated the Brazilian

Conservation Unit System, Petrobras signed vari-

ous agreements to structure conservation units in

Brazil as a result of federal and state environmental

licensing. The action entails investments of around

R$ 203 million.

In October the Company was granted an environ-

mental license from the Ecuador government to oper-

ate in block 31, which has a large part of its territory in

the Yasuni National Park (PNY). The park contains a

wide range of biodiversity and indigenous settlements

of the Huaorani tribe

Petrobras presented the Ecuadorian Ministries of

Environment and Mines with a project to develop the

Apaika Nenke fi eld, in accordance with the principles

of ecoeffi ciency, and to minimize waste of resources,

energy demand and environmental impact. The proj-

ect is based on modern exploration and production

techniques, and care to preserve nature and the social

aspects, as well as strictly comply with the Ecuadorian

regulations. The Environmental Impact Assessment

had already been approved by both ministries in

December 2006.

ENVIRONMENT | PRINCIPLE 7

Piatam project researcher,

Amazonas, coordinated

by Cenpes in partnership

with various research

institutions: UFAM, INPA,

COPPE and FUCAPI

In 2007 the Company did not receive one major

fine, that is, one million reais or over, for failure to

comply with environmental laws and regulations.

The holding’s accumulated penalties for the year

are R$ 388,704.40.

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 75

Principle 8 — Businesses should undertake initiatives to promote greater environmental responsibility

Consumption of energy, materials and natural resourcesREDUCTION IN ENERGY

CONSUMPTION

Petrobras used 554,421 terajoules (TJ) of direct energy

in 2007. But the results for the year by adopting the

House Energy Conservation Program contributed

to a drop in the Company’s energy consumption of

399,602 gigajoules (GJ). Added to the other energy

conservation and effi ciency projects, the result was

399,626 GJ.

The use of thermo-solar energy in the Company

is to conserve energy by implementing water heating

systems in restaurants and washrooms in diff erent

operating and administrative units. The installed

capacity of collector plates for water heating gives a

current saving of 1.2 GWh. A saving of 2.8 GWh has

been accumulated since 2003 by installing 2,177

square meters of solar collectors.

Some of the tasks of the Company’s 32 House

Energy Conservation Committees (Cices) are to calcu-

late the potential cutting energy costs, take actions for

employee consciousness and participate in preparing

Petrobras

in 2007. B

House E

t

3

A saving of 2.8 GWh since 2003 was made by installing 2,177 square meters of solar collectors

technical specifications for design, construction and

procurement of goods and services involving energy

consumption. The Petrobras Guide to Opportunities

in Energy Efficiency instructs Company administra-

tors how to select designs for better energy use when

addressing practices that result in economic, energy and

environmental benefi ts.

76

CONSUMPTION OF ENERGY, MATERIALS AND NATURAL RESOURCES

INDIRECT ENERGY CONSUMPTION BY SOURCE

(TERAJOULES – TJ)

Bought steam (1) 4,579

Bought electricity 15,145

Total (2) 19,724

1) Contains only fuel consumption in Brazil.

2) In Brazil, the estimate is the consumption of 77,351 TJ by the energy suppliers in the

following sources:natural gas (50,288 TJ), diesel fuel (16,904 TJ) and fuel oil (10,159 TJ).

SAVED ENERGY

(GIGAJOULES – GJ)

TYPE 2004 2005 2006 2007

Wind 16.1 19.8 17.4 19.3

Solar 1.2 1.4 2.4 4.3

Geothermal ND ND ND ND

Wave/tide ND ND ND ND

Biomass ND ND ND ND

Other (1) 0.32 0.39 0.46 399,602.46

Total (2) 17.62 21.59 20.26 399,626.06

1) Since 2007, now includes savings resulting from the House Energy Conservation Program.

2) One gigajoule is equal to 0.001 terajoule.

CONSUMPTION OF DIRECT ENERGY BY SOURCE

(TERAJOULES – TJ)

Diesel fuel 7,842

Fuel oil 80,155

Natural gas 322,291

Refinery gas 79,662

LPG 1,311

FCC coke (1) 63,116

Gasoline 32

Jet fuel 12

Renewable sources (carburant hydrous ethyl alcohol) 0.2

Total 554,421.2

1) FCC (Fluid Catalytic Cracking)

WATER

The Company collected 216.49 million cubic meters

(m3) of freshwater (73% from surface sources, 23%

from underground springs and 4% from supply con-

cessionaires and third parties) for use in its operations.

It also reused around 6.98 million m3 of water in its

processes and operations for Supply unit projects.

This volume corresponds to 5% of the total collected

by the area for the period. The volumes of conden-

sate recovered in thermal cycles, re-circulated cooling

water and reinjected for secondary and tertiary oil

production purposes are not counted as reuse since

they are considered normal practice.

In 2007 Petrobras had no signifi cant records of

water sources being aff ected qualitatively (including

ENVIRONMENT | PRINCIPLE 8

biodiversity) or quantitatively by direct collection or

effl uent discharge.

The aim of the Annual Water Resources and

Effluents Report provided by the Standard of

Environmental Management of Water Resources and

Effl uents is to subsidize water management and be the

offi cial communication vehicle between the diff erent

areas and companies in the Petrobras System, and

provide information on the topic to be accompanied

in a systematized, reliable and traceable manner. The

report was standardized and approved in 2007 and

will help build the Company’s fi rst Inventory of Water

Resources and Effl uents already in early 2008.

Data Hidro, which is a computer corporate system

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 77

Materials and natural resources

Petrobras has not yet consolidated the total volume of materials used in

its processes, or percentage of these materials from recycling. However,

emphasis in its operations is on the tire-shale co-processing. The process

was developed in the Shale Industrialization Business Unit (SIX) and

consists of recycling useless tires with shale extracted from mining for oil

and other byproducts.

The process obtains gases, fuel oil and sulfur for use in agriculture

and pharmaceutical and vulcanization industries. The waste, mixed with

the processed shale, is used as feedstock for thermoelectricity plants

or returns to the soil without harming the environment. SIX receives the

useless tires from manufacturers and importers in five Brazilian states.

More than nine million tires have been processed since 2001, when the

technology was first adopted, to 2007.

Pr

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8

data system on water resources and effl uents being

installed in the Company will permit registration and

consulting of quantitative and qualitative data of the

main water currents in the operating units, in addi-

tion to consolidating indicators and costs referring to

the use of water resources. This will facilitate check-

ing compliance with quality standards for use of such

resources and effl uent discharge in the environment.

Corporate indicators of water resources and effl uents

will be adopted in January 2008.

The results of a study for building scenarios on

water availability inform the degree of urgency with

which the operating units must plan actions to antici-

pate possible shortage and identify potential alterna-

tive sources of supply. The study was concluded in

2006 and included 14 units operating in drainage

basins where the social availability of water tends to

diminish. It gathered information about the quality

of water bodies used as supply and the supportive

capacity of water bodies that receive effl uents from

these units.

When undertaking projects relating to the ratio-

nal use of water in their facilities, emphasis is given

to water reused in oil production process, efflu-

ent purifi cation for reuse and optimizing seawater

desalinization systems on off shore platforms. One

purpose of the water reuse projects in progress is

for Capuava Refi nery (Recap) in São Paulo in early

2008 to become the fi rst in the Country with “zero

disposal” of effl uents.

The ecoeffi ciency project of the Cenpes extension

aims to implement an effl uent reuse and treatment

plant to receive all oil spills, sewage and continu-

ous purging from cooling towers, with a total fl ow of

72m3/h, and to generate 67m3/h industrial standard

reuse water. The project, with expected start-up for

2009, will also permit the collection of 80,000m3/year

of storm water.

Planting in the Piava

project, Itajaí Basin,

Santa Catarina

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CARE WITH EMISSION CONTROL

The Air Emission Management System (Sigea) cat-

alogues and details the Company’s air emissions,

involving greenhouse gases and regulated pollutants.

The system includes Petrobras operations and pro-

vides data on more than 20,000 emission sources.

D irect greenhouse gas emissions totaled

49.63 million tons of CO2 equivalent in 2007. This

total includes air emissions from the units at home

and abroad and from ships in its own and chartered

fleets on international voyages. Indirect emissions,

associated with the procurement of electricity and

steam in Brazil totaled 0.36 million tons.

The emission of substances that destroy the

ozone layer from Company processes and opera-

tions is negligible. Brazilian laws forbid government-

related companies — direct, autarchic and other —

from procuring products or plant that contain or

utilize such substances.

During the year Petrobras disposed of 172.8 mil-

lion cubic meters of water effluents from its opera-

tions, including sewage from its administration units.

The volume also includes water disposal produced in

the petroleum extraction process. The legal and house

criteria restricted the oil and grease load launched

by effluents from all Petrobras facilities in 2007 to

1,099.38 tons/year, 1% less than the load disposal in

2006.

All operating units have effl uent treatment plants,

periodically upgraded as new water and effl uent man-

agement practices are developed and when new legal

restraints arise. Since 2008, qualitative and quantita-

tive information on effl uent disposal in Petrobras is

now accompanied and consolidated in the Company

on a systematized and traceable basis.

Of the total 296,000 tons of hazardous solid waste

from processes in 2007, 292,000 tons were reduced,

in other words, treated in an environment-friendly

manner, and the remainder is to be treated in 2008.

For waste treatment, mention should be given to the

incentive for reuse alternatives — 41% of waste was

allocated to reuse as alternative fuel in furnaces and

The Air E

alogu

invol

The s

vides

ENVIRONMENT | PRINCIPLE 8

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 79

4% recycled. And also to recycling lube oil and packag-

ing in the distribution area.

Considering oil and byproduct spills, the

Company maintained its level of excellence in rela-

tion to the global oil and gas industry. During the year,

86 occurrences were registered, totaling a volume of

386m3, 47.7% less than the admissible maximum limit

(739m3) set for the year. The increase in relation to

2006 is due mainly to the inclusion of the spill volume

in distribution operations.

No waste considered hazardous under the

Basel Convention on the Control of Transboundary

Movements of Hazardous Wastes and their Disposal

was transported, imported, exported or treated; nor

did it transport any international waste.

OPERATING HIGHLIGHTS

Prevented greenhouse gas emissions (PGHGE)

are one of the Petrobras strategic indicators, and one

of its corporate targets is the commitment to prevent

emission of 21.30 million tons of CO2 equivalent in the

period 2007-2012. Prevented emissions in 2007 were

2.53 million tons of CO2 equivalent, 24.6% higher in

than the total for 2006, which was 2.03 million tons. The

PGHGE indicator refers to the performance of projects

included in the scopes of energy effi ciency, operating

improvements and optimizing flare burning and fuel

substitution/ alternative sources.

Since 1974 the Company has been adopting the

House Energy Conservation Program, which coor-

dinates and implements activities relating to energy

effi ciency and economizes around 2,800 barrels of oil

equivalent a day. Another action contributing to the

prevention of greenhouse gas emissions is the Campos

Basin Gas Use and Optimization Program, a volunteer

project to reduce gas fl are burning. The program seeks

further use of associated gas produced in 24 platforms

by installing and upgrading compressors, installing gas

pipelines and optimizing processing plants. In 2007,

93 actions were completed resulting in a potential gain

in gas use of 4.2 million m3 a day.

One of the projects in 2007 to minimize environ-

mental impacts is the hydrotreatment diesel plant

in Capuava Refi nery (Recap) which has a processing

capacity of 4,000m3 a day and includes a sour gas treat-

ment section. The project allows simultaneous pro-

duction of treated diesel and turpentine, eliminating

the production of wild naphtha, an effl uent harmful

to the environment.

AIR EMISSIONS(‘000 TONS)

2005 2006 2007

17.2

4

151.6

5

22

3.12

17.11

151.9

6

23

3.5

4

15.2

2

150

.90

222.

80

NOx

SOx

Other significant air emissions (particulate)

2005 2006 2007

51.5

6

0.3

15

1.25

50

.43

0.5

74

9.8

6

49

.99

0.3

64

9.6

3

Direct emissions

Indirect emissions (1)

1) Other indirect greenhouse gas emissions, as stated in scope 3 of the

GHG Protocol Initiative, are not part of the inventory scope and therefore

are not included.

TOTAL DIRECT AND INDIRECT

GREENHOUSE GAS EMISSIONS(MILLION TONS OF CO2 EQUIVALENT)

80

EMISSÕES, EFLUENTES E RESÍDUOS

PAST SERIES OF SPILLS (1)

(M3)

2003 2004 2005 2006 2007

276 530 269 293 386

1) Counting oil and byproduct spills of more than one barrel (0.159 m3) aff ecting the environment.

TOTAL HAZARDOUS SOLID WASTE PER DISPOSAL METHOD

(TONS)

Storage on site (disposal in mines –SIX Process) 21,662.3

Disposal in landfill 24,957

Incineration 16,417

Incineration (reuse as alternative fuel) 120,207

Recuperation 10,862

Reuse 148

Biological treatments 25,005

Underground injection 0

Other(1) 72,321

1) Waste treatment using more than one technology, employing, for example, thermal plasma, by heat desorption with direct or indirect flame.

In 2007, the semi-industrial plan began operating

using plus multiphase waste thermal treatment tech-

nology, which allows reuse of up to 99% of the waste

volume. When the waste is exposed to high tempera-

tures the sediments, water and oil are separated. The

technology not only greatly reduces waste volume

and increases productivity but also strives for ecoef-

fi ciency, since it is a closed cycle without incineration

and emission of pollutant gases.

A totally flexible tool was designed to travel

through irregular pipes with closed bends and widely

varying diameters to detect and quantify internal pipe-

line corrosion. The equipment called ‘pig palito’ or

pipeline inspection gauge (pig) makes operations safer

and permits corrective interventions before failure or

spills occur, preventing environmental damage. The

pig is a common device in the oil and gas industry, trav-

eling inside the pipeline and can have various func-

tions, for example, inspection, cleaning or physical

separation of transported fl uids.

Since 1974 the Company has been running the House Energy Conservation Program which

coordinates and implements activities relating to energy effi ciency and saves around 2,800 barrels

of oil equivalent a day.

ENVIRONMENT | PRINCIPLE 8

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 81

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PRESERVATION AND RECOVERY

OF ECOSYSTEMS

Petrobras agrees in its code of ethics to contribute to

preserving and recovering biodiversity through man-

agement of potential impacts caused by its operations

and by running projects to protect endangered areas

and species.

In 2007 a working group was set up to be con-

cluded at the end of 2008 to standardize concepts

and methodologies for the mapping process of the

protected, sensitive and vulnerable areas in the zones

aff ected by Company projects. The work intends to

complement the information available to date and

produce an integrated and georeferenced database.

The action will also provide mapping of zones with a

high rate of biodiversity outside protected areas.

The areas aff ected by the operations are also being

demarcated and areas of total protection, sustainable

use and high biodiversity value in them will be sur-

veyed. The data should be available by 2010.

The Supply area is systematically taking specifi c

actions to identify fragments of vegetation and pro-

tected areas within and outside its units in Brazil, in

order to restore these ecosystems. Part of Presidente

Bernardes Refi nery (RPBC) is in a conservation unit

— the Serra do Mar State Park. This area occupies

292.9 hectares, 42.7% of the refinery’s total area.

Some Supply units have specially protected areas in

their vicinity but there is not necessarily any impact

in such places.

The main objective of the Piatam Program —

Potential Impacts and Environmental Risks of the Oil

and Gas Industry in the Amazon — coordinated by

the Federal University of Amazonas and Petrobras

since 2001 is to collect data, information and samples

on ecosystems and human populations. It not only

furthers knowledge about the regions under study but

also helps monitor and assess oil exploration impacts

on the Amazon, prepare HSE management procedures

— which includes managing potential impacts on bio-

diversity — and helps defi ne various environmental

and support projects for social development.

Petrobra

preservin

agement

a

a

Ecosystems and biodiversity

82

ECOSYSTEMS AND BIODIVERSITY

LAND USE IN LEGALLY CONSTITUTED PERMANENT PRESERVATION AREAS (APP)

SUPPLY AREA UNITS

BUSINESS UNIT (1) TOTAL AREA(HA)

OCCUPIEDAREA (HA)

TOTAL APP(HA) % APP

Fafen-BA (Camaçari, Bahia) 42.34 41.95 0 0

Fafen-SE (Laranjeiras, Sergipe) 72.4 27.9 8.34 11.52

Lubnor (Fortaleza, Ceará) — — — —

Recap (Mauá, São Paulo) 178.62 73.006 22.199 12.43

Reduc (Duque de Caxias,Rio de Janeiro) 990.55 500.37 433.12 43.73

Regap (Betim, Minas Gerais) 873.77 203.17 167.04 19.12

Reman (Manaus, Amazonas) — — — —

Repar (Araucária, Paraná) 990.4 406.6 47.1 4.76

Replan (Paulínia, São Paulo) 923.81 456.468 38.03 4.12

Revap (São José dosCampos, São Paulo) 981.2 576.5 42.2 4.3

Rlam (São Francisco de Conde, Bahia) 671.1 325.71 174.49 26

RPBC (Cubatão, São Paulo) 682.9 263.3 97.3 14.25

SIX (São Mateus do Sul, Paraná) 414 105.5 15.6 3.77

1) Data collection on Reman and Lubnor Units is in progress.

ENVIRONMENT | PRINCIPLE 8

Some of the studies underway are focused on top-

ics such as limnology (freshwater and its organisms),

modeling (displacement of oil spills in aquatic envi-

ronments), fl ora, tropical diseases, socio-economics,

aquatic macrophytes (aquatic plants), entomology

(insects), ichthyofauna (fi sh) and reforestation.

A tool was designed and applied to assess the criti-

cal aspects in relation to biodiversity and it off ers an

overview of the various Supply units, based on socio-

environmental aspects, impacts, business, legal and

image requirements and relations. The results show

which are the most critical units (this does not mean

that they are causing major impacts). The units give

priority to the activities involving implementation of

the biodiversity management system.

New projects in one of these units must prefer-

ably avoid protected habitats and seek to protect areas

of permanent protection and preserve the fragments

of native vegetation. Some units adopt master plans

that defi ne land use and occupation regulations, and

consider the creation of Legal Reserve areas. One of

the projects to recover degraded areas in 2007 was the

Mined Area Recovery Program (SIX), which during the

years restored 166 hectares by planting 186,000 seed-

lings. This program has been operating for 30 years

and has reforested 550 hectares of a total 714 hectares

of mined area.

In the Exploration and Production area, the

Amazon Business unit (UN-AM) created a nursery

for seedlings of native rainforest species used to

restore forest clearings, and provides an orchidarium

where orchid and bromeliad species are studied and

preserved, to be later reintroduced to the reforested

areas. The Exploration and Production Business unit

in Rio Grande do Norte and Ceará (UN-RNCE) signed

an agreement with the Ceará State Environment

Supervision body to set up the Carnaubas Park

Conservation unit for Full Protection, and for eco-

nomic ecological zoning of the caatinga or scrub

savanna biome and mountain rainforests of Ceará.

Studies are undertaken to diagnose the marine

environment, socio-environmental actions are taken

with neighboring communities, and farming-forest

systems, mangrove recovery projects and ecosystem

restoration are implemented. A legal requirement for

the units is also to support maintenance projects or

create protected areas to compensate for new facilities

or upgrade of their projects.

The survey is still incomplete regarding the num-

ber of species on the IUCN Red List (International

Union for the Conservation of Nature and Natural

Resources) and on national lists of endangered species

inhabiting areas infl uenced by Petrobras operations.

By using the maps of environments sensitive to oil

spills created by Cenpes, animal species were identi-

fi ed whose habitats are in areas susceptible to dam-

age in the event of oil spills from Transpetro opera-

tions and the Sergipe and Alagoas Exploration and

Production Business Unit (UN-SEAL). Fifty-seven

threatened species were included in the IUCN Red

List and the list of endangered species of the Brazilian

Ministry of the Environment (MMA), including

amphibians, reptiles, birds and mammals. The list

covers the coast of ten Brazilian states.

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 83

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Supply units have identified 41 animal species

and one plant on the IUCN Red List. Only one mam-

mal is on the MMA list. In the UN-RNCE, seven species

of aquatic invertebrates and one fi sh species appear

on the MMA list.

Although it is not yet possible to list all endan-

gered species found around Company facilities, eff orts

are made to increase scientifi c learning in Brazil and

to conserve endangered and other species and eco-

systems. Examples of these identifi ed species are the

Parana pine (Araucaria angustifolia), and pied tamarin

(Saguinus bicolor) found only in the Manaus region in

the Amazon, inhabiting a remnant of vegetation inside

Isaac Sabbá Refi nery (Reman). The migratory routes

of mammals and marine chelonians are also studied,

contributing to increasing learning about the move-

ments and health of the populations of these animals

off the Brazilian coast.

Petrobras completed the first stage of the proj-

ect of characterizing deepwater coral in the Campos

Basin, the largest oil-bearing province in Brazil. New

species, genera and families of marine invertebrates

were discovered, some never recorded before on the

Brazilian coast. The study not only furthers scientifi c

knowledge but also contributes to keeping operating

licenses of projects, obtaining a license to install sub-

sea structures and a guarantee from the Japan Bank for

International Cooperation to fi nance the oil pipeline

that will carry the production from Marlim Leste.

The Company signed an agreement with MMA

and executive bodies of sponsored projects to con-

serve marine biodiversity to develop joint lines of work

to prevent extinction of threatened species and ele-

ments of Brazilian marine biodiversity, to reduce the

degree of threat in endangered species. The Integrated

Strategic Planning was designed for a ten-year period

(2007-2016) and includes the following projects:

Atlantic Right Whale, Humpback Whale, Spinner

Dolphin, Manatee and Tamar. These projects also

take specifi c actions depending on the characteristics

of each species and region.

Petrobras is a member of the International

Petroleum Industry Environmental Conservation

Association (IPIECA), and participates in various

working groups, one of them focusing on the biodi-

versity theme. In 2007 the WG meeting was held in

Rio de Janeiro to discuss strategies and challenges in

biodiversity management, and a seminar for the inter-

nal public attended by representatives from Shell and

British Petroleum (BP) was held to exchange experi-

ences and increase understanding of the topic.

The corporate standard of Management of

Potential Impacts on Biodiversity was approved in

2006 and identifi cation, analysis and forwarding the

biodiversity requirements to be considered when

assessing new Petrobras projects are planned for 2008,

plus completion of a corporate guide to biodiversity

management in the Company for a better understand-

ing. Other planned actions are to draft a biodiversity

policy, prepare a proposal on corporate indicators

for biodiversity management, guidelines to include

socio-environmental aspects in biodiversity action

plans (provided in the corporate model) and to iden-

tify requirements relating to biodiversity protection

throughout the life cycle of biofuels.

ENVIRONMENTAL

SPONSORSHIPS

In addition to the actions relating to environmental

management processes, Petrobras promotes the pro-

tection and restoration of the main habitats found in

Petrobras sponsors

projects that protect

endangered species, such

as the humpback whale

84

ECOSYSTEMS AND BIODIVERSITY

INVESTMENT IN ENVIRONMENTAL PROJECTS IN 2007

LINE OF ACTION R$ ‘000

Restoration and conservation of environments relating to water bodies 12,182

Promotion and practices of rational use of water resources 9,635

Implementing integrated management of water resources 7,890

Marine biodiversity 6,859

Other (events, publications and other projects) 15,162

Total (*) 51,728

(*) Of this total, R$ 38.9 million was invested through the Petrobras Environmental Program

ENVIRONMENT | PRINCIPLE 8

the area of infl uence of its plants, by encouraging pub-

lic initiatives by sponsoring environmental projects.

In Brazil, the Petrobras Environmental Program

includes projects with common objectives for the

promotion and consciousness of communities in the

rational use of water resources and to maintain and

restore landscapes for the water cycle to function, as

well as promote management and conservation of the

species and threatened off shore environments. The

theme of the program, created in 2003, is “Water: fresh

and salt water bodies — including their biodiversity”

and invested R$ 38.9 million in 2007.

Every two years public selection processes for

new projects are held in order to increase society’s

access to the sponsorships. The diff erent stages are

conducted by Petrobras, MMA, civil society repre-

sentatives and academics. The projects in the first

selection were more than 250 counties, with 900,000

hectares of direct influence. The 36 projects in the

second public selection are in progress.

The aim of one of these projects — Goliath

Groupers — Strategies for Conservation of

Brazilian Coastal and Marine Environments — is to

protect the goliath grouper, a marine fi sh extremely

threatened in nature. Actions involve research and

conservation, with the participation of fi shermen to

collect data and exchange information, surveys and

monitoring of its breeding grounds, environmental

management, education and communication.

The Keeping an Eye on the Water project in

Northeast Brazil aims to improve the quality of

water systems in the Icapui coastal plan in Ceará.

Its work includes environmental diagnosis of the

coastal region and marine ecosystems, and uses

techniques of rational use of water resources. One

of the expected results is groundwater depollution,

recovering mangroves and protecting the habitat of

the manatee and migratory birds.

The Caring for the Water project encourages

preservation and recovery of the Atlantic rainforest

in Conservation Units in Rio de Janeiro, and helps

restore the quality of the water. The project takes

actions on environmental education, capacity build-

ing, gallery forest rehabilitation and reforestation of

small rural areas.

In the Business unit in Colombia, support for the

project Protección Tortugas Marinas helps protect

the sea turtles that cross the Colombian Caribbean,

where they fi nd food and is a migratory corridor for

diff erent species to lay their eggs on the beaches of

Tayrona Park. The sponsorship also involves man-

agement and maintenance of nests and building

more suitable facilities.

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 85

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ENVIRONMENT STANDARDS

INCLUDED IN CODE OF ETHICS

Petrobras agrees in its code of ethics to uphold stan-

dards of excellence in environment to guarantee

products and services that meet its client expecta-

tions and environmental legislation in Brazil and the

countries where it operates. It also agrees to provide

its consumers, clients, community and society with

information about any environmental damages result-

ing from improper use and the fi nal destination of its

products.

The production processes are managed based

on safety procedures and control of environmental

impacts. Standard ISO 14001 stipulates that risks

associated with the products must be monitored and

proper procedures adopted to minimize these risks.

The chemical safety information cards (FISPQ) in

Portuguese, English and Spanish are designed and

updated for all Company products. The card con-

tains information about composition of the product,

physical and chemical properties, environmental and

health hazards, handling precautions and procedures

in case of accident. The labels of the product packag-

ing, principally lube oils, also contain information

about handling and use precautions, and disposal

of packaging.

Since 1994, the On the Right Road project has

been operating as a systemic assistance network for

truck drivers in Petrobras service stations strategically

located along the main Brazilian highways. Services

are provided, such as assessing the vehicle conditions

and regulating the engine. The Keeping an Eye on

Fuel confirms the quality of the Petrobras fuel and

looks to sensitizing resellers and end consumers when

explaining the problem of adulteration and its dam-

ages. Another prime action is recycling used lubes and

their packaging.

Petrobras Distribuidora developed a life cycle

study that compares environmental performance

of the conventional and ecological asphalt (which

Petrobra

dards of

product

t

c

Products, conformity and transportation

Sulfur in diesel

During the year, some segments of Brazilian society, for example government sectors and NGO’s, demanded

Petrobras to give a position on the diesel sulfur level of the product sold in Brazil. Another question was why

a product with less sulfur was not available on the market earlier.

In November the Company informed that from 2009 on it will supply fuel with 50 ppm of sulfur for heavy

diesel vehicles. Nine billion reais will be invested by 2012 in diesel hydrotreatment plants in nine refineries to

achieve these targets. Other adaptations are expected to eff ectively reduce emissions, such as using a new

technology in vehicles, according to the requirements of phase P-6 of the Automobile Air Pollution Control

Program (Proconve), instituted by the Brazilian Environmental Council (Conama).

Petrobras has been a member of Proconve and since it began in 1986 it fulfills all quality targets provided,

with investments to reduce the sulfur content of diesel. Today the Company is a member of a working group

formed by the Brazilian Ministry of Mines and Energy, to study the actual impacts of using diesel with 50 ppm

sulfur in the current fleet.

86

PRODUTOS, CONFORMIDADE E TRANSPORTE

uses recycled tire rubber). The HSE Handbook for

Production Management by Clients and Partners

is being standardized and is the first handbook on

fuel oil. It is a pilot project for a computer system

on product management to follow up and improve

waste management from marketed products. The

operation of the service station network substituted

the old for new jacketed and two-compartment

tanks (in 2007, 827 new tanks were installed), and

819 preventive watertight tests were run.

The subsidiary also takes actions to collect, recy-

cle and reuse waste from some of the products that it

sells, such as lube oil, for example. In compliance with

Brazilian law, the collection of used oil was more than

30% of new oil sales, with waste going to re-refi ning

throughout Brazil. Also by prevailing laws, more than

20% was collected of used lube oil packaging in Rio de

Janeiro and Rio Grande do Sul. The percentage of what

was actually recovered, recycled or reused asphalt is

more than 80%.

Liquigás sells its LPG in returnable bottles. All bot-

tles undergo a treatment process before being fi lled with

LPG, and all are reused - around 21 million bottles. In

2007, Liquigás rehabilitated around 7.8 million bottles.

ANP states that the Company must rehabilitate around

100,000 bottles a month. Rehabilitation is the total

recovery process of the cylinder so that it can be used

in complete safety for more than ten years.

The Road Transportation Safety regulation provides

general guidelines for both goods and passenger trans-

portation at the service of Petrobras, as safe as possible.

Increased transportation safety reduces the rate of spills

and impacts on the environment. This regulation also

provides for exercising or demanding control of pol-

luting emissions of vehicles at the Company’s service,

under prevailing environmental laws.

The Responsible Transportation Program of

Petrobras Distribuidora aims to improve the qual-

ity of the subsidiary’s transportation, which includes

as one of its projects meetings with carriers, and the

Cool Driver campaign that assesses the drivers’ state

of health. Liquigás is gradually substituting its fleet

dedicated to exclusive use for transporting products,

with new vehicles that have a lower degree of air pol-

lution emission. For safe people transportation strict

criteria are defi ned in relation to specifying vehicles

and driver conduct requirements.

In 2007, Verana diesel was put on the market as

a specifi c fuel for the leisure sailing market. It has a

98% reduction in sulfur content (maximum 200 ppm),

compared to the conventional marine diesel (10,000

ppm), and also off ers a better performance and dura-

bility of the engines and reduces the smoke by up to

83% in relation to marine diesel fuel.

ENVIRONMENT | PRINCIPLE 8

PetrobrasRoad

Transport Safety

standard seeks maximum

safety for people and

merchandise

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 87

Bu

sin

ess

es

sho

uld

un

der

take

init

iati

ve

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pro

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te g

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nv

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8

INCENTIVE TO CONSCIOUS

CONSUMPTION

Petrobras off ers administrative, fi nancial and technical

resources to the National Program for Streamlining

Use of Petroleum and Natural Gas Byproducts

(Conpet), which takes actions to diminish energy

consumption in Brazil. One such action is the

Transporting project, to save on diesel and reduce

emissions by controlling the emission of black smoke

from transporter vehicles and petroleum byproduct

distributors that fuel up in refi neries. In 2007, around

18 million liters of diesel was saved and another 25,000

tons or so of prevented CO2 emissions into the air. The

Economize project works with freight and passenger

vehicles also in controlling black smoke and saved

around 270 million liters of diesel, in addition to pre-

venting the emission into the air of around 390,000

tons of CO2.

In December, the Company delivered the Conpet

Seal for Energy Effi ciency to manufacturers of stoves,

ovens and gas water heaters with higher rates of energy

Petrobra

resources

Use of P

(

c

Energy conservation and conscious consumption

effi ciency. The use of more effi cient equipment saves

energy and benefi ts the environment when emitting

less greenhouse gases.

On the same occasion, the National Prize for

Conservation and Rational Use of Energy was awarded

to projects that increase the energy effi ciency in pro-

duction processes and disseminating the culture of

responsible energy consumption. There are six prize-

winning categories: Press; Industry; Public administra-

tion agencies and companies; Very small, small and

midsize businesses; Companies in the energy sector;

and Buildings. The prize was created in 1993 by the

Brazilian Ministry of Mines and Energy, coordinated

and performed by Petrobras through Conpet, and by

Eletrobrás, through the Brazilian Energy Conservation

Program (Procel).

88

Principle 9 — Businesses should encourage the development and

diff usion of environmentally friendly technologies

Renewable energies

ENVIRONMENT

GLOBAL BIOFUEL BENCHMARK

In 2007 Petrobras invested R$ 51.67 million in

renewable sources (biofuels, solar, wind and small

hydroelectricity plants) and the forecast for 2008 is

R$ 644.85 million. According to the 2020 Petrobras

Strategic Plan, the Company intends to act globally

in biofuel trading and logistics, leading the national

biodiesel production and increasing its share in the

ethanol business. The biofuel business segment will

receive investments of US$ 1.5 billion between 2008

and 2012. It also foresees the creation in 2008 of a

subsidiary to run the activities of this segment.

The fi rst bio-ethanol pilot plant in Brazil to use

enzymatic technology has begun operating and pro-

duces biofuel from agroindustrial waste, which does

not compete with food farming production. Petrobras

is forerunner in second biofuel generation and its par-

ticipation in the segment permits energy production

from raw material today considered as waste, namely

sugarcane bagasse, and ethanol production without

increasing the cropping area.

I

r

h

R

S

The H-BIO technology produces diesel fuel by

blending vegetable oils with mineral diesel through

hydro-conversion under high temperature and hydro-

gen pressure. The end product has lower sulfur con-

tent and density. The technology has been adopted

in the Gabriel Passos (Regap), Alberto Pasqualini

(Refap), Presidente Getulio Vargas (Repar) and

Paulinia (Replan) refineries. The processing of 256

million liters of soybean oil in these units will provide

a 10% decrease in external diesel procurement.

Diff erent raw materials are tested for the biodiesel

production process, including soybean, suet, palm,

cotton and castor oils. Today two technological routes

are available: oil (vegetable oils or animal fats) and

seeds (oilseeds).

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 89

OTHER RENEWABLE SOURCES

In addition to being used in the biofuel segment, dif-

ferent actions focus on environment-friendly renew-

able energy sources. The Company invests in wind

and biomass energy, and considers opportunities in

small hydroelectricity plants (SHEP) and solar energy,

for example.

In March, Petrobras received registration of its

first design for a Clean Development Mechanism

(CDM) defi ned in the Kyoto Protocol. Two electric

generators and one oil mechanical pump — both

diesel run — were substituted in the wind plant in

Rio Grande do Norte for three electric wind powered

generators that total a capacity of 1.8 MW. The plant

is responsible for 1,300 tons of prevented CO2 equiv-

alent a year due to the renewable power generation.

Its registration occurred after complying with a

long list of requirements, consisting of various certi-

fi cation and approval stages. Today the project is at a

stage of monitoring prevented emissions. After audit-

ing the process, Petrobras may earn carbon credits.

New technologies underway will enable biofuel

production in the Company’s refining processes

using biomass and bio-oil (oil produced from sug-

arcane straw).

With investments of R$ 1.2 billion, the construc-

tion of 13 SHEPs in Brazil will generate 5,000 direct

and 15,000 indirect jobs. The total energy gener-

ated of 300 MW is enough to supply a population

of 3.5 million. SHEPs are considered plants with a

capacity between 1 MW and 30 MW, and area with

restricted reservoir.

Solar energy is used in various forms through pho-

tovoltaic panels for powering monitoring and meter-

ing equipment in distant places as a diesel substitute.

Petrobras is the largest hydrogen producer in

Brazil. More than 500 tons a day are manufactured

using its technology. A number of studies are focus-

ing on hydrogen fuel as a feasible energy source,

used in a bus prototype and the Cenpes data pro-

cessing center.

Construction of 13 small hydroelectricity plants will receive investments of

1.2billionreais and create

5,000direct jobs

Women working in the

sunfl ower fi elds, used in

the production of biodiesel

in Passagem Communitiy,

Pedra de Maria da Cruz

90 ENVIRONMENT

Ceap Center of Environmental

Excellence of Petrobras in the

Amazon

CASE STUDY ENVIRONMENT

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 91

Petrobras is aware of the huge responsibility of the

organizations toward the planet’s future, and takes

numerous actions to preserve the environment. One

such action is the Centre of Environmental Excellence

of Petrobras in the Amazon (Ceap). The project was

launched in 2007 to combine frontline technology

and scientific knowledge with the commitment to

social and environmental responsibility, necessary for

the Company’s sustainable operations in the Amazon

Rainforest. Ceap is the management tool that facilitates

the Company’s strategic partnerships with universities,

research institutions, governmental agencies, non-

governmental organizations and economic agents, to

a total of 34 already, seeking integration and coopera-

tion for enhancing the regional socio-environmental

actions already taken. With positive refl ections also

for other networks, the Center operates in reducing

risks associated with interventions of the oil industry

through 30 projects in progress, which will concen-

trate investments of over R$ 500 million by 2012.

The Piatam Project, for example, is one of the

projects covered by Ceap to monitor oil and natural gas

production and transportation from Urucu, the largest

Brazilian onshore oil and gas province in the Amazon

rainforest. Four times a year over 200 researchers set

out on excursions during the diff erent hydrological

seasons of the Solimões River (fl ood, drought, low and

fl ood water). The researchers cover 400 kilometers

to study nine riverbank communities. The data and

samples are collected and put into an information sys-

tem to create environmental sensitivity maps that can

help the oil industry in event of accidents. It is a single

management in the Amazon of calculating environ-

mental risk. The project will be made easier using the

Hybrid Environmental Robot, designed by the robotics

group of the Cognitus Project, undergoing fi eld tests

for implementation in the Amazon region.

The Water Collective Help Project: Conservation

and Sustainable Use of Water Resources using

Shared Management, developed in partnership with

the National Rubber Tappers Council, works on the

sustainability of the area of influence of the Urucu-

Manaus gas pipeline, with actions for extractivist river-

bank communities, encouraging shared management

of water resources and the understanding of the risks

or potential impacts of starting up the gas pipeline.

To add economic value for the family agro-

extractivism in the region Petrobras offers the

Social-Participative Certifi cation of Agro-extractivist

Products, a partnership between the Amazon Working

Group and Social Technology Network. The project

works with families in communities, helping build

citizenship and preserve the natural environments by

adopting a process that prioritizes upgrade of the tra-

ditional techniques of handling natural resources.

Petrobra

organizat

numerou

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o

Petrobras considers transparency to be not only a public Petrobras considers transparency to be not only a public commitment but also active management practice. One of the key commitment but also active management practice. One of the key values consolidated in its stakeholder relations, improving corporate values consolidated in its stakeholder relations, improving corporate governance practices and increasing social and environmental governance practices and increasing social and environmental responsibility actions. Company principles are in line with its responsibility actions. Company principles are in line with its Strategic Plan and are disseminated through its code of ethics. Strategic Plan and are disseminated through its code of ethics. The Ombudsman’s Office is also an important channel of dialogue The Ombudsman’s Office is also an important channel of dialogue between Petrobras and its relation publics. The purpose of rendering between Petrobras and its relation publics. The purpose of rendering accounts to society is to provide more transparency about the accounts to society is to provide more transparency about the Company’s activities and results.Company’s activities and results.

Transparency

94

Stakeholder relations

COMMUNICATION CHANNELS

The increase in operating and financial results of

Petrobras is accompanied by improvement in practices

of corporate governance, transparency and increase in

actions of social and environmental responsibility.

The Company seeks to enhance its administration

through diff erent communication channels that bring

it closer to its stakeholders, with ethics and transpar-

ency, to promote ongoing dialogue with clients, local

and neighboring communities, the scientifi c and aca-

demic community, suppliers, press, investors, part-

ners, public authorities, in-company public, resellers

and civil society organizations. The concern regard-

ing the engagement of its stakeholders pervades the

Strategic Plan and is identified in the 2020 Mission

and Vision, Strategic Objectives and Performance

Indicators of the Balanced Scorecard (BSC), corporate

policies, values and behaviors. To maintain an ongoing

relationship with the key groups, Petrobras analyzes

research results that provide detailed knowledge and

help chart opportunities for dialogue to potentialize

The incr

Petro

of co

actio

The C

TRANSPARENCY

other actions of stakeholder relations.

The Petrobras Integrated Communication plan

(PIC) helps defi ne the groups in which engagement is

strategic in order to identify and select its stakehold-

ers. The process consists of checking and acquiring

scientifi cally based knowledge about demands, expec-

tations and opinions of each group, and the degree of

dependence, participation and infl uence. Petrobras

holds meetings, public hearings, scheduled visits in

the communities and provides printed matter when

fi rst implementing its projects. To attract analysts and

investors, the Company holds conference calls, road-

shows, chats and internet service. The website devel-

oped by Investor Relations (IR) (www.petrobras.com.

br/ri) provides information to shareholders, investors

and analysts. Contact can also be made by mail, fax,

e-mail and phone.

In 2007, 700 meetings, 11 international con-

ferences and events were held to introduce the

Company and explain events to the public.

WWW.PETROBRAS.COM.BR | SOCIAL AND ENVIRONMENTAL REPORT 2007 95

Petrobras has a client satisfaction poll procedure

— a quantitative survey, with structured questionnaire

by phone or personal interview —, a requirement of

the standard ISO 9000. The poll assesses topics on

value perception, such as: negotiation, delivery, collec-

tion, credit, issue of documentation, relations, product,

post-sale service, commercial conditions, general satis-

faction, price and competition. Corrective and preven-

tive actions are taken after the results. Petrobras selects

members of the Brazilian Association of Research

Companies (Abep) and European Society of Opinion

Marketing Research (Esomar) to undertake the market

and opinion polls. They are organizations that establish

and demand compliance with the essential poll criteria

and certify the good quality of the work done.

The Petrobras corporate communication poli-

cies include principles of transparency with fast

ongoing communication about activities, prod-

ucts and services, emphasizing its corporate social

responsibility.

Petrobras offers the Consumer Call Service

(SAC), focusing on consumers, shareholders and

employees. SAC is the main channel to obtain infor-

mation, make comments, praise, criticism or sugges-

tions. In addition, the Petrobras Client Channel is an

electronic commerce platform of the oil industry and

vehicle through which clients can trade and follow

up business with the Company. It is a secure, fast,

effi cient and economic environment for commercial

relations 24 hours a day.

Petrobras performs an organizational environ-

ment survey to monitor its employees’ perception of

the working atmosphere, commitment to the Company

and social responsibility. The survey provides mecha-

nisms to guarantee confi dentiality of the information,

and the answers measure employee satisfaction with

the Company.

Relations with inspection agencies and govern-

ments are intended to comply with the legislations

in countries where Petrobras operates. Sponsorship

programs permit exchange of knowledge between the

Company and civil society. The press also has access to

information through press releases, scheduled visits,

collective interview and through the website www.

noticiaspetrobras.com.br.

Petrobras evaluates and seeks the best solution for

topics and concerns raised by stakeholders. It explains

questions and possible crises, off ering fast complete

information.

In 2007 the civil society the demanded further

explanations about the compliance with the quota

of people with disability and existence of a policy or

census to identify the number of Afro-descendant

employees in the Company. Those items are dis-

cussed in the theme “Petrobras” in this report.

Regarding environmental issues, the main ques-

tions of society were the operations in Ecuador

— addressed “Human Rights” —, sulfur content in

diesel — addressed at the Environment Chapter—

and compensation to fi shermen in Guanabara Bay,

Rio de Janeiro, for the spill of 1.3 million liters of oil

on January 18, 2000.

In the lawsuit in progress against the Company,

Petrobras is not disputing the need to compensate

the fi shermen but rather the term by which the com-

pensation must be paid and total number of fi sh-

ermen who are benefi ciaries, since environmental

agencies claim that there were only 3,339 registered

fi shermen in activity at the time of the accident. The

appeals are awaiting the Rio de Janeiro state law

courts for admission and then will be sent for the

fi nal decision in the federal capital.

To settle these concerns, the Company cre-

ated working groups that include press profession-

als to consider solutions and action plans to settle

the matters under discussion. Through the Crisis

Communication System, Petrobras has put into

systematized practice its valuable experience accu-

mulated in crisis communication management. The

system defi nes roles and responsibilities at the vari-

ous hierarchical levels of Petrobras, forms a group of

impacted segments, either of members of the board

of directors, employers, communities, public author-

For an ongoing relationship with key groups, Petrobras analyzes research results for detailed knowledge and to chart opportunities for dialogue to potentialize the development of other actions for stakeholder relations

96

CLAIM EVOLUTION PERFORMANCE

23,6

62

14,11

1 15,6

52

2005 2006 2007

CLAIM STATUS

22.970Concluded

CONTACT MEDIA

E-mail 22,803

Letter 410

Personal service 310

Telephone 122

Fax 17

Total 23,662

692Pending

ities, shareholders, clients, consumers, suppliers,

resellers or other corporate relation segments.

Petrobras is committed to keeping the public

informed about any occurrence that is a community

safety and health hazard, or that may cause damage

to the environment; to provide clear and accurate

information to the segments aff ected by the crisis,

and continue providing fast, objective and transpar-

ent information to meet information demands of

stakeholders.

In this way the Company fulfi lls its public respon-

sibility, preserves its corporate image and protects

the interests of its shareholders and employees.

OMBUDSMAN

The Ombudsman has the task of receiving opinions,

suggestions, criticism, complaints and accusations

from Petrobras stakeholders. The Ombudsman’s

office is much more than a channel of dialogue

between the citizens, workforce and top management

of the Company; it is also an instrument to encourage

transparency, valorize human rights and principles of

the Global Compact, refl ecting the Company’s con-

cern about such key issues. The Ombudsman acts

with isonomy, and reinforces the principles of ethics,

dialogue and transparency in working relations and

with all stakeholders. Complaints are screened and

forwarded to the relevant areas to address the prob-

lems. Actions are based on guaranteed confi dential-

ity and anonymity of the claimants. Accusations with

accounting, fi nancial or audit content are reported

to the Company’s Board of Directors through the

Audit Committee.

The Internal Audit and Corporate Security Areas

specializing in investigation undertake audits and

investigations from denouncements sent to the

Ombudsman. The result of this work is forwarded

to those responsible for the units, which stipulate

sanctions and specifi c measures, depending on the

gravity of the outcome. The Ombudsman’s offi ce,

which is an offi cial channel for denouncements in

the Company, requests and receives the results to

fi nalize the procedure, which is audited annually in

compliance with the requirements of the Sarbanes-

Oxley Act. The Ombudsman’s offi ce was featured

in the Global Accountability Report 2007 — report by

the One World Trust NGO, as good practice of social

responsibility.

TRANSPARENCY

WWW.PETROBRAS.COM.BR | SOCIAL AND ENVIRONMENTAL REPORT 2007 97

MONITORING THE

CORPORATE IMAGE

For checking and periodical follow-up of its image,

Petrobras decided to develop the Corporate Image

Monitoring System (Sismico), which integrates and

consolidates information about the opinions of vari-

ous publics and public opinion about the Company.

Sismico provides structured knowledge of how

Petrobras is considered by each group with reference

to topics such as management, competitiveness, eth-

ics, social and environmental responsibility, world-

wide operations and future vision. The system gives

details of interference of social and environmental

responsibility indicators in the composition of the

corporate image for each segment in question.

A study called the Corporate Social Responsibility

Monitor by the consulting firm Marketing Analysis

assesses the degree of recognition of a company’s role

in corporate social responsibility. In 2007, the Company

ranked fi rst with 10.8% of all spontaneous mentions

in the survey. Petrobras also has a reputation indicator

obtained by using the RepTrak® methodology, a system

developed by Reputation Institute, which compares the

reputation quotient of companies in their countries

of origin. In the 2007 study — Global RepTrak® Pulse

—, the Company achieved the position of eighth best

reputation worldwide, and best reputation in Brazil, in

recognition of its socially responsible actions.

The Company

assesses the

stakeholders’

perception to

monitor its image

STAKEHOLDER RELATIONS

Sismico

Public Authorities

Social NGOs

Environmental NGOs

Suppliers

Local Communities

Customers

The Media

Shareholders Public Opinion

Employees

98

MINIMUM RISKS

Petrobras is constantly assessing the life cycle of

its products and services, creating procedures to

minimize impacts on health and safety, and strives

to improve its operations. Petrobras Distribuidora

prepares chemical safety information cards contain-

ing data on receipt, storage, loading, distribution/

transportation and trading of its products, as well as

analysis of aspects that could be an environmental or

health hazard. The Company adopts the procedures

required by the regulatory Brazilian Oil, Natural Gas

and Biofuel Agency (ANP) to include on the labels of

all its products and services information about origin,

field of application, purpose, benefits, warning and

precautions. It also acts according to the regulations

and did not have one case of non-conformity in 2007

with voluntary codes relating to information and label-

ing of products and services.

In relation to health and safety impacts caused

by products and services, the Bayeux School-

Service Station in Paraíba State was charged for

Petrobra

its produ

minimiz

t

p

Products and services

TRANSPARENCY

disposal of liquid waste – raw sewage — failing

to comply with legal requirements, against the

prevailing environmental law. The petition was

granted and Petrobras Distribuidora was sentenced

to pay a fine of ten thousand reais. The Company

complied with the regulations and is awaiting deci-

sion of the appeal.

Petrobras has no record of any lawsuit against

copyright of an advertising piece or cases of non-

conformity with marketing messages, including

publicity, sponsorship and promotion. There was

no case of complaint of violating privacy. The

Petrobras System had to disburse R$ 448.4 million

for contractual and regulatory fines.

Petrobras paid an offi cial fi ne of R$ 1,570,076.31

for divergence in percentages when importing pro-

pane and commercial butane. The Company paid a

fi ne of R$ 36,342,081.73 for interstate sales operations

by Petrobras Distribuidora to Companhia Vale do

Rio Doce for the periods November 2004-December

WWW.PETROBRAS.COM.BR | SOCIAL AND ENVIRONMENTAL REPORT 2007 99

2005 and January-May 206. Petrobras paid a fi ne of

R$ 1,396,944.29 for imputing the ICMS (VAT) tax

collection on a diesel import operation when it had

been collected as petroleum.

No lawsuits were detected for unfair competition,

trust or monopoly practice in the Company.

Petrobras assures

resources to protect

employees and

community in event

of accidents

Petrobras products are labeled with information on origin, application, purpose, benefi ts, warnings and precautions

100

CODE OF ETHICS

The Petrobras Code of Ethics is a valuable tool for

adopting the principles that guide the Company’s

actions and conduct commitments. The code explains

the moral sense of the Mission, Vision and Strategic

Plan of Petrobras and consists of a public commitment

to adopt these principles in everyday concrete prac-

tices. In August 2005, the Company began the code

review process, in order to update the instrument and

adapt it to the requirements in the Sarbanes-Oxley Act,

which provides the approach of specifi c items to the

codes of ethics of companies with shares in the New

York Stock Exchange. The indicators of Corporate

Social Responsibility formulated by Ethos Institute

were used as factors to structure the themes in the new

code of ethics. In its revision, seminars were held to

create the new code in various units and subsidiaries,

involving clients, suppliers, executive directors, board

of directors, and the entire workforce in a transparent

and participative process.

Petrobras uses standardizing management tools,

The Petro

adop

actio

the m

Plan o

Anti-corruption and anti-bribery

policies

Principle 10 — Businesses should work against corruption in all its forms

TRANSPARENCY

for example, codes of competitive conduct and

good practices, and adopts the code of conduct of

the top federal administration, whose application is

supervised by the Public Ethics Commission of the

Presidency of the Republic. The Company does not

contribute to political parties or politician election

campaigns and rejects any practice of corruption and

bribery. Petrobras conducts its business with transpar-

ency when taking action and stances especially with

regard to public information.

TRANSPARENCY AND

CORPORATE INTEGRITY

Petrobras does not undertake risk assessment

relating to corruption but does investigate denounce-

ments forwarded by the Ombudsman’s offi ce, external

control bodies — Federal Audit Court and Federal

Investigations Bureau — and public prosecution ser-

vice. The Company holds scheduled audits to check

situations that require special attention. The Corporate

WWW.PETROBRAS.COM.BR | SOCIAL AND ENVIRONMENTAL REPORT 2007 101

Protection management participates in investigation

committees that can discover any involvement of

employees in devious conduct that, in some cases,

may be considered acts of corruption.

House campaigns are held to train employees

in anti-corruption policies and procedures and new

employees are encouraged to assimilate the anti-

corruption topics in the Petrobras System code of

ethics. The code also includes moral principles such

as not agreeing to favoritism and nepotism and refus-

ing to receive undue benefi ts.

The Company has strong views regarding par-

ticipation in preparing public policies and lobbies.

Petrobras agrees in the code of ethics, under prin-

ciple 8.5, to contribute with public authorities to

prepare and adopt general public policies and spe-

cifi c programs and projects relating to sustainable

development. Moreover, it appreciates employee

involvement and commitment in discussions and bid

preparations, bearing in mind the compatibility and

reinforcement of social projects, in actions with pub-

lic and private, governmental and non-government

organizations. The National Congress, through its

representatives, has become an excellent channel to

explain and protect the national interests of the oil

and gas sector. Public meetings guarantee that mat-

ters of interest to Petrobras are addressed under the

normal democratic process, with full right of defense

and disclosure of facts and actions. Participation

of Company executives in the hearings evidence

Petrobras eff orts to reassert its strategic importance

in the country’s development and to adopt the

structuring public policies, especially in the Growth

Acceleration Plan (PAC) designed to raise Brazil to

a new level of development. The Company directors

participated in three hearings, presenting the PAC

works schedule for the energy sector. Petrobras is

Employees are trained inanti-corruption procedures, as provided in the Petrobras System code of ethics

striving to improve bills of law for the oil industry and

amendments that protect Brazilian interests.

Public selections provide sponsorship to

other cultural, environmental and social projects.

Petrobras strives for transparency through the

nationwide democratic process.

The Company runs special caravans as capacity

building workshops and provides tools for institutions

to learn how to prepare social and environmental proj-

ects. As a result, Petrobras assures equal conditions

of participation in order to achieve and give access to

many more projects.

ANTI-CORRUPTION MEASURES

Petrobras was involved in an intense informative pub-

lic campaign for the investigation of the Federal Police

and Public Prosecution offi ce on frauds in some bids

involving its employees. In early 2007, the joint ven-

ture between Petrobras, Braskem and Ultra bought

the Ipiranga group for R$ 8.2 billion and increased its

leadership from 30% to 37% in the market. There was

suspected irregularity and the Brazilian Securities and

Exchange Commission (CVM) opened an inquiry on

ANTI-CORRUPTION AND ANTI-BRIBERY POLICIES

102

fraud after detecting an atypical increase in business of

the Company shares and involvement of people linked

to the Company. Petrobras set up a house committee

to investigate the facts disclosed by CVM relating to

the presumed occurrence of trading with evidence of

privileged information by an employee at management

level before the publication of the announcement of

the Ipiranga takeover. The Commission discovered

the facts and concluded that there was no information

leak, since there was no conclusive evidence or proof

of share buying and selling operations to benefi t one

of the Company’s employees. But the employee was

negligent in the fact that he failed to inform his supe-

riors of his trading with Ipiranga shares days before the

deal was consolidated, which characterizes failure to

comply with the code of ethics. On March 23, 2007,

this employee left his position as executive manager

in Petrobras Distribuidora, returned as a Petrobras

employee and then asked for early retirement, leaving

the Company.

In August 2007, Petrobras signed an agreement

to acquire all capital stock of Suzano Petroquímica

S.A. for a total price of R$ 2.7 billion. However, Rio

de Janeiro Judiciary suspended the trading on the São

Paulo Stock Exchange (Bovespa), after suspecting

leak of privileged information. Around R$ 1.5 million

in profi t obtained by two investors was suspended

at the request of the CVM and Public Prosecutor’s

Offi ce. In a public hearing of the Mines and Energy

Committee of the House of Representatives, it

was proven that the Company was not negligent in

the case of leak of information of the state-owned

Company’s takeover operation. The suspect inves-

tors illegally used the information in their possession

without the knowledge of Petrobras.

Infringements of the code of ethics are liable for

penalties provided in the disciplinary system regula-

tions, with a written warning, suspension and can-

cellation of the employment contract. When there

is evidence of disciplinary or legal infringements or

damages, the Company defines the measures to be

taken for compensation, application of disciplinary

sanctions and adoption of other applicable adminis-

trative, civil or criminal measures.

Despite the total strictness of internal and exter-

nal controls, Petrobras investigates and tries to fi nd an

effi cient solution for all devious behavior, penalizing

those involved according to the law. The Company is

signatory to Partnering against Corruption Initiative

(Paci) to harmonize the treatment of corruption-

related issues. Petrobras agrees to adopt a policy of

zero tolerance against bribery and to develop and

implement an active comprehensive anti-corrup-

tion program as a guide to employee behavior. The

Company is also committed to the Extractive Industries

Transparency Initiative (Eiti), a voluntary initiative to

support better governance efforts of countries rich

in natural resources by fully publishing and checking

corporate payments and government revenue from

the oil, gas and mining sectors.

TRANSPARENCY | PRINCIPLE 10

The Company is signatory of the Partnering Against Corruption

Initiative (Paci) and Extractive Industries Transparency

Initiative (Eiti)

WWW.PETROBRAS.COM.BR | SOCIAL AND ENVIRONMENTAL REPORT 2007 103

In July 2007, major Brazilian newspapers headlined

a joint operation called Deepwater, run by the Public

Prosecution Service and Federal Police, which were

investigating frauds in some Petrobras bids.

In January 2006, shortly after the start of the

operation, the Company collaborated with the inves-

tigation of the facts, holding special internal audits

and giving information to the official investigation

agencies.

Besides this unrestricted and close collaboration

with the Public Prosecutor’s Office, confidentiality

was required during the investigations. For this reason

measures to correct deviations in the Company found

during investigations were only adopted after July 10,

2007, when the operation was announced as a result

of police action.

Petrobras now took various actions based on this

fact to correct deviations. An investigation committee

was set up to check functional responses. Employees

in managerial positions were dismissed. Three

employees involved in the fraudulent processes were

dismissed for just cause. The service contracts arising

from the bidding processes in which the faults were

found during investigation were cancelled.

Petrobras, as signatory to the UN Global Compact,

is duty bound to work against corruption in all its

forms, including bribery and extortion. The Company

also participates in the Partnering against Corruption

Initiative (Paci), a joint anti-corruption project to

which the case study was sent. The document is avail-

able on the Petrobras website.

In accordance with its code of ethics, the Company

“works against any bribery and corruption practices,

maintaining formal procedures of control and con-

sequences on possible transgressions”. Moreover, in

its with supplier, service provider and intern relations,

the Petrobras System agrees to “request corporate ser-

vice providers to ensure that their employees respect

the ethical principles and commitments to conduct

defi ned in the code of ethics, while under contract to

the companies in the System”.

The Company control procedures are closely

supervised by internal and external audits, the press,

the Federal Audit Court (TCU), Federal Investigations

Bureau (CGU), Brazilian Securities and Exchange

Commission (CVM) and U.S. Securities and Exchange

Commission (SEC).

I

a

P

i

Anti-Corruption

CASE STUDY TRANSPARENCY

APPENDICES104

Appendices

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 105

INDICATOR 2007 2006 2005

FINANCIAL

Market value (R$ million) 429,923 230,372 173,584

Net operating revenue (R$ million) 170,578 158,239 136,605

Net income (R$ million) 21,512 25,919 23,725

Income before interest, tax, depreciationand amortization – EBITDA (R$ million)

50,275 50,864 47,808

Distributed total added value (R$ million) 120,138 120,695 108,241

Total investments (R$ million) 45,285 33,686 25,710

Earnings per share (R$) 4,90 5,91 5,41

OPERATIONAL

Oil and gas production (‘000 boed) 2,301 2,298 2,217

Proven oil and gas reserves (billion boe) 15 15 14.9

Reserve replacement index 98.4% 113.9% 102.3%

Byproduct production (‘000 bpd) 2,046 1,892 1,839

Byproduct sale (‘000 bpd) 3,239 3,052 2,808

ENVIRONMENT

Oil and byproduct spills (m3) 386 293 269

Energy consumption (terajoule – TJ) 574,145 576,762 521,613

Greenhouse gas emissions (million tons CO2 equivalent) 49.99 50.43 51.57

Carbon dioxide emissions – CO2 (million tons) 45.37 46.13 46.59

Methane emissions – CH4 (‘000 tons) 206.02 189.82 222.97

Nitrous oxide emissions – N2O (tons) 919.5 997.23 981

Air emissions – NOx (‘000 tons) 222.8 233.54 223.12

Air emissions – SOx (‘000 tons) 150.9 151.96 151.65

Air emissions – particulate material (‘000 tons) 15.22 17.11 17.24

Freshwater removal (million m³) 216.49 178.8 158.5

Water eff luent disposal (million m³) 172.8 164.3 159

OCCUPATIONAL HEALTH AND SAFETY

Lost Time Injury Frequency Rate – LTIFR(includes employees and outsourcees)

0.76 0.77 0.97

Fatalities (includes employees and outsourcees) 15 9 15

Fatal accident rate (fatalities per 100 million men-hours of risk exposure – includes employees and outsourcees)

2.28 1.61 2.81

Percentage of Lost Time (includes only employees) 2.19 2.06 2.48

EMPLOYEES

Number of employees 68,931 62,266 53,933

Number of outsourcees 211,566 176,810 155,267

CONTRIBUTIONS TO SOCIETY

Investments in social projects (R$ million) 248.6 199.6 183.3

Investments in cultural projects (R$ million) 205.5 288.6 264.6

Investments in environmental projects (R$ million) 51.7 44.6 44.2

Investments in sports projects (R$ million) 80 58.2 25.8

Performance Table

APPENDICES

106

1 - CALCULATION BASE 2007 VALUE (R$’000) 2006 VALUE (R$’000)

Net earnings (NE) 170,577,725 158,238,819

Operating income (OI) 35,977,804 40,672,492

Gross payroll (GP) 7,919,274 6,615,683

2 - INTERNAL SOCIAL INDICATORSVALUE

(‘000) % ON GP % ON NEVALUE

(‘000) % ON GP % ON NE

Meals 547,790 6.92% 0.32% 443,854 6.71% 0.28%

Compulsory social charges 3,355,374 42.37% 1.97% 3,121,887 47.19% 1.97%

Private pension scheme 554,845 7.01% 0.33% 590,354 8.92% 0.37%

Health 2,138,366 27.00% 1.25% 2,030,426 30.69% 1.28%

Occupational Safety & Health 95,031 1.20% 0.06% 76,862 1.16% 0.05%

Education 95,284 1.20% 0.06% 87,189 1.32% 0.06%

Culture 22,794 0.29% 0.01% 30,844 0.47% 0.02%

Capacity building & professional development 386,452 4.88% 0.23% 328,700 4.97% 0.21%

Day nurseries or nursery benefit 2,319 0.03% 0.00% 1,835 0.03% 0.00%

Profit or income sharing 1,011,914 12.78% 0.59% 1,196,918 18.09% 0.76%

Other 66,335 0.84% 0.04% 66,837 1.01% 0.04%

Total - Internal social indicators 8,276,504 104.51% 4.85% 7,975,706 120.56% 5.04%

3 - EXTERNAL SOCIAL INDICATORS (I) VALUE (‘000) % ON OI % ON NE

VALUE (‘000) % ON OI % ON NE

Income Generation and Job Opportunity 58,838 0.16% 0.03% 33,762 0.08% 0.02%

Education for Professional Qualification 64,878 0.18% 0.04% 81,895 0.20% 0.05%

Guaranteeing the Rights of the Child and Adolescent 110,615 0.31% 0.06% 73,549 0.18% 0.05%

Culture 205,518 0.57% 0.12% 288,569 0.71% 0.18%

Sports 79,989 0.22% 0.05% 58,197 0.14% 0.04%

Other 14,275 0.04% 0.01% 10,430 0.03% 0.01%

Total contributions to society 534,113 1.48% 0.31% 546,402 1.34% 0.35%

Taxation (excluding social charges) 70,127,540 194.92% 41.11% 71,274,595 175.24% 45.04%

Total - External social indicators 70,661,653 196.40% 41.42% 71,820,997 176.58% 45.39%

4 - ENVIRONMENTAL INDICATORSVALUE

(‘000) % ON OI % ON NEVALUE

(‘000) % ON OI % ON NE

Investments relating to the Company’s production/operation 1,924,698 5.35% 1.13% 1,359,428 3.34% 0.86%

Investments in external programs and/or projects 51,728 0.14% 0.03% 44,641 0.11% 0.03%

Total investments in environment 1,976,426 5.49% 1.16% 1,404,069 3.45% 0.89%

With regard to setting “annual targets” to minimize waste, general consumption in production/operation and to be more eff ective in using natural resources, the Company (i)

( ) has no targets( ) achieves 0 – 50%( ) achieves 51 – 75%( × ) achieves 76 – 100%

( ) has no targets( ) achieves 0 – 50%( ) achieves 51 – 75%( × ) achieves 76 – 100%

5 - WORKFORCE INDICATORS 2007 2006

No. employees at end of period 68,931 62,266

No. of admissions during period (II) (i) 4,263 7,720

No. of outsourcees (i) 211,566 176,810

No. of interns (II) (i) 1,213 686

No. of employees over 45 years old (II) 26,073 20,007

No. of women working in the Company (III) 10,722 6,664

% of senior positions occupied by women (II) 13.50% 12.40%

No. of Afro-descendents working in the Company (IV) 3,004 2,339

% of senior positions occupied by Afro-descendents (IV) (i) 3.10% 3.10%

No. of employees with disability or special needs (V) 1,026 1,009

Social Report 2007 Ibase Model

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 107

6 - RELEVANT INFORMATION REGARDINGPRACTICE OF CORPORATE CITIZENSHIP 2007 TARGETS 2007

Ratio between highest and lowest remuneration in Company 32.3 32.3

Total number of occupational accidents (VI) (i) 503 495

The social & environmental projects undertaken by the Company were defined by:

( ) directors ( × ) directors & managers

( ) all employees

( ) directors ( × ) directors & managers

( ) all employees

The safety and health standards in the working environment were defined by:

( × ) directors & managers

( ) all employees

( ) everyone + Cipa

( × ) directors & managers

( ) all employees

( ) everyone + Cipa

With regard to union freedom, the right of collective bargaining and internal representation of the workers, the Company:

( ) does not get involved

( ) adopts ILO standards

( × ) encourages& adopts ILO

( ) will not get involved

( ) will adopt ILO standards

( × ) will encourage & adopt ILO

The private pension scheme considers: ( ) directors ( ) directors & managers

( × ) all employees

( ) directors ( ) directors & managers

( × ) all employees

Profit or income sharing considers: ( ) directors ( ) directors & managers

( × ) all employees

( ) directors ( ) directors & managers

( × ) all employees

When selecting suppliers, the same ethical standards and of social and environmental responsibility adopted by the Company:

( ) are not considered

( ) are suggested

( × ) are demanded

( ) will not be considered

( ) will be suggested

( × ) will be demanded

Concerning employee participation in voluntary work, the Company:

( ) does not get involved

( ) gives support

( × ) organizes & encourages

( ) will not get involved

( ) will give support

( × ) will organize & encourage

Total number of complaints and criticism of consumers: (VII) (i) in Company 11,328

in Procon 15

in court23

in Company 2,700

in Procon15

in court23

% of complaints and criticism attended to or settled: (VII) (i) in Company 97.41%

in Procon 53.33%

in court34.78%

in Company 99.8%

in Procon53.33%

in court34.78%

Total added value of distribution (in R$ ‘000): In 2007: 120.138.295 In 2006: 120.694.637

Added Value Distribution (AVD): 59% government 11% collaborators7% shareholders 11% third parties12% withheld

60% government 8% collaborators8% shareholders 9% third parties15% withheld

7 - OTHER INFORMATION

1) CNPJ: 33000167/0001-01 - Economic sector: Industry / Oil, Gas & Energy - Brazilian State where company is registered: Rio de Janeiro

2) For further information on statement: Wilson Santarosa - Executive Manager for Institutional Communication - Phone (+55 21) 3224-1009 - E-mail comunicacao@petrobras.com.br

3) This Company does not use child or slave labor, not is involved with child or adolescent prostitution or sexual exploitation, and is not involved with corruption.

4) Our Company valorizes and respects diversity in and outside the company.

I.The Social Report 2007 now uses as external social indicators the working lines developed by the Company. The 2006 values were distributed according to a new model. Ibase permits items to be used

that only present focal investments regularly made by the Company.

• Income generation and job opportunity includes investments in projects against hunger and for food security.

• Education for Professional Qualification includes investments in the Petrobras Young Apprentice Program, totaling a little over R$ 26 million.

• Guaranteeing the Rights of the Child and Adolescent includes the transfer to the Fund for Childhood and Adolescence (FIA).

• Culture includes investments referring to cultural incentive laws in Brazil.

• Sports includes investments referring to the Sports Incentive Act.

• Other includes investments in health and sanitation projects.

II. Information from the Petrobras System in Brazil.

III. Information on 2006 refers to Petrobras Holding. Value for 2007 now includes the entire Petrobras System.

IV. The pilot-project for the Petrobras House Census began in December 2006, with planning, developing methodology and preparing the questionnaire in 2007. The data collection process and analysis of

results will be concluded in the first half of 2008, with the participation of an external research Company selected by public bidding. The reported data refer to the 2004 survey, estimated with basis on the

total number of employees in the Petrobras Holding at December 31, 2007.

V. Of the total 68,931 employees in the Petrobras System, 6,783 belong to the international area and not subject to Brazilian law. From the remaining, 15,767 occupy positions where vacancies are reserved

for people with disability. Among these employees, 1,026 are people with disability, corresponding to 6.5% of the workforce in this condition.

VI. Number of casualties with sick leave per million men-hours of risk exposure, including the Company’s own employees and those from contractors. For 2008, the number of casualties statistically

expected is based on a forecast of 727 million men-hours of risk exposure and the admissible maximum limit foreseen for the Frequency Rate of Casualties with Sick Leave (TFCA).

VII. Information in the Company includes the quantitative of complaints and criticism received by the CAS of Petrobras Holding and Petrobras Distribuidora. The Company’s 2008 target only contains the

estimate of the Petrobras Holding.

i. Unaudited

APPENDICES

108

Environment Award American-Brazilian Chamber

of Commerce. Two award-winning projects in the

Water Management and Environmental Education

categories.

Carolita Kallaur Prize Awarded by the International

Regulators Forum (IRF) for best safety results,

extended to contractors.

Brazil ian Conser vation & National Use of

Energy Awarded by the Ministry of Mines & Energy

in the industry category under alternative energy.

2007 Global Accountability Report – One World

Trust Outstanding good social responsibility

practices

Gender Equality Seal Awarded by the Special Women’s

Policy Secretariat of the Presidency of the Republic,

UN Development Fund for Women (Unifem) and

International Labor Organization (ILOT).

Corporate Citizen Certificate Awarded by the Regional

Accounting Council (CRCRJ) to encourage under-

taking, publishing and valorizing the social reports

of Brazilian companies and organizations.

Excelencia Ciudadana Prize Awarded by the Latin

American Development Center (Celade) for opera-

tions in Uruguay.

Social Intelligence Prize In the Citizenship categories;

Education; Environment; Safety and Human Rights.

Transparency Trophy Awarded by the Brazilian

Association of Accounting, Administration and

Finance Executives (Anefac).

Marketing Best Social Responsibility The prize is

an initiative of the Editora Referência and Madia

Marketing School. There were eleven award-winning

projects.

Top Social Organized by the Brazilian Association of

Sales & Marketing Directors (ADVB). Twelve award-

winning projects in Rio de Janeiro and five in São

Paulo.

Petroleum Economist Award In the Investor

Communications Team of Year 2006 category.

Global Pipeline Award 2007 Awarded by the American

Society of Mechanical Engineers (Asme).

The Best of Dinheiro In the category of Best Company

in Corporate Governance. Innova, a subsidiary of

Petrobras Energia, was first in the Chemical &

Petrochemical segment.

Tribute to the thousandth patent deposited by

Petrobras in Brazil Run by the federal trademark

and patent off ice (INPI).

Latin American Deal of the Year Awarded by Project

Finance International (PFI) for Financial Structuring

of the Upgrade Project of Henrique Lage Refinery

(Revap).

Aberje Award – Espirito Santo and Rio de Janeiro

Region In the categories of Communication and

Supplier Relations; Communication & Relationship

with Government Organizations; Communication

& Press Relations; Marketing Communication

Campaign; Communication & Investor Relations;

Digital Media Management

Marketing Best Prize Awarded by Editora Referência,

Getulio Vargas Foundation São Paulo Business

Administration School, and Madia Mundo Marketing.

Seven prize-winning projects.

Top of Marketing Awarded by the Brazilian Association

of Sales & Marketing Directors (ADVB). Seven prize-

winning projects.

Outstanding Marketing Award – Brazilian Marketing

& Business Association (ABMN) Eight proj-

ects awarded in the categories: Business Social

Responsibility; Products; Promotional Marketing; and

Incentive Marketing. Petrobras was also awarded

with the Grand Prix for having won the highest

number of prizes.

Empresa dos Sonhos dos Jovens Universitários Chosen

in a research run by the consulting firms Cia de

Talentos and LabSSJ.

Corporate University Best in Class 2007 – International

Quality & Productivity Center (IQPC) In the cat-

egory Best Corporate University.

Educare – National Prize for Excellence in

Education Awarded by Educartis in the Corporate

Education category.

Brazilian Quality Award (PNQ) In the Large

Corporations category.

Brazil Intangibles Prize (PIB) In the main category, Top

Intangible 2007. The awards are an initiative of the

Padrão Group and DOM® Strategy Partners.

Ibero-American Prize for Quality 2007 Awarded by the

Ibero-American Foundation for Quality Management

(Fundibeq) to Colombia business unit.

Nobel Peace Prize Petrobras employees Paulo Cunha,

Paulo Rocha and José Domingos Miguez are mem-

bers of the Intergovernmental Panel on Climate

Change (IPCC).

CIO of the Year Award – Info Corporate Magazine

Awarded to the executive manager of Information

Technology, Washington Salles.

Distinguished Achievement Award for Individuals –

Off shore Technology Conference (OTC). Awarded

to Marcos Assayag, general manager of E&P Basic

Engineering of Cenpes.

A list with further details and other awards is available

on the Petrobras website.

Prizes

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 109

Materiality

To help define the topics addressed in the 2007 Social

and Environmental Report, Petrobras invited representa-

tives of its stakeholders to participate in a survey called

Materiality Test. Here participants were given a ques-

tionnaire with sustainability-related topics, rated accord-

ing to their relevance.

The list of priority subjects was suggested by

Petrobras in accordance with criteria, such as rel-

evance to the sector’s activities and their mention in

the Company’s commitments (for example, Global

Compact), including other matters. However, the par-

ticipants were free to suggest other topics not included

in the questionnaire.

Sixty people took part in the surveys carried out

in workshops in Rio de Janeiro and São Paulo and by

telephone interviews. These participants represent the

following segments: clients and resellers; academic and

scientific community; communities; consumers (end

consumers – filling up at service stations); suppliers;

press; investors; partners (institutions and associations

in which the Company has a share); public authori-

ties; internal public, and the third sector. The surveys

were conducted by BSD Consultoria, accompanied by

Petrobras representatives.

In addition to meetings with stakeholders, members

of the Committee for Drafting Social and Environmental

Responsibility Reports — representing the areas in the

Petrobras System — were also consulted in order to pri-

oritize the topics according to company expectations.

Consolidation of priority matters according to these

two outlooks — consulted company and stakeholders —

made it possible to build the Materiality Matrix in which

the topics are organized in the squares according to

the degree of relevance obtained. Petrobras chose to

address all topics in squares II, III and IV and some in

square I in this report.

When doing the Materiality Test, the Company con-

siders the expectations of a number of stakeholders

with respect to a more objective and suitable content

of the Report, contributing to a more participative draft-

ing process.

The layout of the topics in the squares reflects the

degree of importance – or materiality – attributed

to them. The more important the topic for the stake-

holders and the Company, the higher and more to the

right is its position in the matrix (square III).

This matrix considers only the title subjects. The

matrix with the 61 specific topics under consideration

is found on the Petrobras home page in the Social

Responsibility area.

MATERIALITY MATRIX

SUBJECTS

01 Competitors

02 Outsourcing

03 Human Resources

04 Economic impact

05 Public Regulation

06 Society

07 Sustainable Development

08 Community Relations

09 Customer Relations

10 Supplier Relations

11 Strategic Planning

12 Human Rights

13 Health & Safety

14 Corporate Governance

15 Environment

01

0203

04

06 08

0910 11

12 13

1415

07

05

Le

ve

l o

f im

po

rta

nc

e f

or

sta

ke

ho

lde

rs

Level of importance for Company

IIIII

IVI

APPENDICES

110

The Indicator Matrix of the Petrobras Social and Environmental Report lists the contents

discussed and their location in the report. Its structure is defined by the third version

of the Global Reporting Initiative (GRI).

Petrobras states that it belongs in level A+ since it uses the GRI Sustainability Report

Guidelines when drafting its Social and Environmental Report, answering all the essen-

tial indicators and undertaking an external audit of the disclosed information. KPMG

Independent Auditors is the external auditing firm hired to audit and review the SER

with information for 2007. The firm’s opinion, disclosed on page 116, does not mention

any deviation in relation to the Petrobras classification at the level of application A+.

PROFILE

STRATEGY & ANALYSIS

INDICATOR TOPIC PAGE AUDIT/ REVISION

1.1 Statement by holder of highest decision making power in the organization (such as CEO, chairperson of board of directors or equivalent position) on the relevance of sustainability for the organization and its strategy.

3 R

1.2 Description of the main impacts, risks and opportunities. 17 R

ORGANIZATIONAL PROFILE

INDICATOR TOPIC PAGE AUDIT/ REVISION

2.1 Name of organization. 6 A

2.2 Main brands, products and/or services. 6,8 R

2.3 The organization’s operating structure, including main divisions, operating units, subsidiaries and joint ventures. 6,9 R, R

2.4 Address of organization’s head off ice. 117 R

2.5 Number of countries in which the organization operates and name of countries in which its main operations are located or as specially relevant for questions of sustainability covered by the report.

10 R

2.6 Type and legal nature of the property. 6 A

2.7 Markets attended (including geographic description, sectors attended and types of client/beneficiary). 6 R

2.8 Size of the organization. 12,13 R, R

2.9 Main changes during the period covered by the report referring to size, structure or share holdings. 10, 11, 12 R, R, R

2.10 Awards received during the period covered by the report. 108 R

GRI APPLICATION LEVEL

C C+ B B+ A A+

Mandatory Self-statement ,

Optional Examined by third parties ,

Indicator Matrix

Essential indicators

Additional indicators

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 111

REPORT PARAMETERS

INDICATOR TOPIC PAGE AUDIT/ REVISION

3.1 Period covered by the report (such as fiscal/calendar year) for the information provided. 20 R

3.2 Date of latest previous report (if any). 20 R

3.3 Cycle of report issue (annual, biennial, etc.) 21 R

3.4 Data for contact in case of questions about the report or its content. 21 R

3.5 Process for definition of report content, including: determination of materiality; prioritization of topics in the report; identification of which stakeholders the organization expects will use the report.

20, 21 R, R

3.6 Report boundary (such as countries, division, subsidiaries, leased facilities, joint ventures, suppliers). For other instructions, consult the GRI Boundary Protocol.

20 R

3.7 Statement about any specific restraints regarding scope or boundary of report. 20 R

3.8 Basis for preparing the report which refers to joint ventures, subsidiaries, leased facilities, outsourced operations and other organizations that can significantly aff ect the ability to compare periods and/or organizations.

20 R

3.9 Data measuring techniques and calculation bases, including hypotheses and techniques that sustain the estimates applied to compiling the indicators and other information in the report.

20 R

3.10 Explanation of consequences of any reformulations of information provided in earlier reports and the reasons for such reformulations (such as mergers or takeovers, change in period or base-year, nature of the business, measuring methods).

20 R

3.11 Major changes in comparison with earlier years with regard to scope, boundary or measuring methods adopted in the report.

20 R

3.12 Table that identifies the location of information in the report. 110 R

3.13 Policy and current practice relating to finding external check for the report. If the check is not included in the sustainability report, it is necessary to explain the scope and basis of any external check provided, as well as the relationship between the reporting organization and auditor(s).

20, 21 R

GOVERNMENT, COMMITMENTS AND ENGAGEMENT

INDICATOR TOPIC PAGE AUDIT/ REVISION

4.1 Governance structure of the organization, including committees under the top governance body responsible for specific tasks, such as establishing a strategy or supervising the organization.

7, 9 R, R

4.2 Indication if the president of the highest governance body also be a CEO (and, if so, his/her functions within the administration of the organization and reasons for such composition).

7 R

4.3 For organizations with a single administration structure, statement of the number of independent or non-executive members of the highest governance body.

7 R

4.4 Mechanisms for shareholders and employees to make recommendations or provide instructions to the highest governance body.

95 R

4.5 Relationship between remuneration for members of the highest governance body, executive board and other executives (including rescission agreements) and the organization’s performance (including social and environmental performance).

50 R

4.6 Processes in force in the highest governance body to assure prevention of disputes of interest. 7 R

4.7 Process to determine the qualifications and know-how of members of the highest governance body to define the organization’s strategy for questions relating to economic, environmental and social topics.

7 R

4.8 Statements of mission and values, codes of conduct and relevant in-company principles for the economic, social and environmental performance, as well as the stage of its implementation.

back-cover, 7, 17

R, R, R

4.9 Procedures of the highest governance body to supervise identification and management by the organization of the economic, environmental and social performance, including relevant risks and opportunities, as well as agreement with or conformity to internationally agreed standards, codes of conduct and principles.

7 R

4.10 Processes for self-assessment of performance of the highest governance body, especially regarding the economic, environmental and social performance.

7 R

4.11 Explanation of whether and how the organization adopts the principle of precaution. 69 R

4.12 Charters, principles or other projects developed externally of an economic, environmental and social nature that the organization undersigns or endorses.

18 R

4.13 Participation in associations (such as industry federations) and/or national/international defense organizations in which the organization: has a seat in groups responsible for corporate governance; integrates projects or committees; contributes with major resources beyond the basic rate as a member organization; considers its role as member strategic.

18, 19 R, R

4.14 List of groups of stakeholders engaged by the organization. 94 R

4.15 Basis for identifying and selecting stakeholders with which it is engaged. 94 R

4.16 Approaches to engage stakeholders, including the frequency of the engagement by stakeholder type and groups. 94 R

4.17 Main topics and concerns that were raised through the engagement of stakeholders and what measures the organization has adopted to address them.

94, 95 R, R

APPENDICES

112

ECONOMIC

INDICATOR TOPIC PAGE AUDIT/ REVISION

Information about management method. 7,8 R, R

ECONOMIC PERFORMANCE INDICATORS

ECONOMIC PERFORMANCE

INDICATOR TOPIC PAGE AUDIT/ REVISION

EC1 Direct economic value earned and distributed, including revenue, operating costs, employee remuneration, donations and other investments in the community, accumulated profits and payments for capital providers and governments.

13 AR

EC2 Financial implications and other risks and opportunities for the activities of the organization due to climate change. 71 R

EC3 Coverage of obligations of defined benefit pension plan off ered by the organization. 51 AR

EC4 Significant financial aid received from government. 12 AR

MARKET PRESENCE

INDICATOR TOPIC PAGE AUDIT/ REVISION

EC5 Variation in proportion of the lowest wage compared to the local minimum wage in important operating units. 50 R

EC6 Policies, practices and proportion of expenses with local suppliers in important operating units. 27 R

EC7 Procedures for local hiring and proportion of senior management members recruited from the local community in important operating units.

50 R

INDIRECT ECONOMIC IMPACTS

INDICATOR TOPIC PAGE AUDIT/ REVISION

EC8 Development and impact of investments in infrastructure and services provided, principally for public benefit, through commercial engagement, in kind or pro bono activities.

25 R

EC9 Identification and description of significant indirect economic impacts, including the extent of impacts. 27 AR

ENVIRONMENTAL

INDICATOR TOPIC PAGE AUDIT/ REVISION

Information about management method. 68, 69 R, R

INDICATORS OF ENVIRONMENTAL PERFORMANCE

MATERIALS

INDICATOR TOPIC PAGE AUDIT/ REVISION

EN1 Materials used by weight or volume. 77 NA

EN2 Percentage of materials used from recycling. 77 NA

ENERGY

INDICATOR TOPIC PAGE AUDIT/ REVISION

EN3 Direct energy consumption described by primary energy source. 75, 76 R, R

EN4 Indirect energy consumption described by primary source. 76 R

EN5 Energy saving due to improvements in conservation and eff iciency. 75 R

EN6 Projects to provide goods and services with low energy consumption, or that use energy generated by renewable resources, and reduction in the need for energy as a result of such projects.

88, 89 R, R

EN7 Projects to reduce indirect energy consumption and reductions achieved. 75 R

WATER

INDICATOR TOPIC PAGE AUDIT/ REVISION

EN8 Total water removal per source. 76 R

EN9 Water sources significantly aff ected by water removal. 76 R

EN10 Percentage and total volume of water recycled and reused. 76 R

BIODIVERSITY

INDICATOR TOPIC PAGE AUDIT/ REVISION

EN11 Location and size of area owned, leased or administrated within or next to protected areas, and areas with a high rate of biodiversity outside the protected areas.

82 R

EN12 Description of significant impacts in biodiversity of activities, goods and services in protected areas and in areas with a high rate of biodiversity outside the protected areas.

81 R

EN13 Protected or restored habitats. 84 R

EN14 Strategies, measures in force and future plans for managing impacts on biodiversity. 81, 82, 83 R, R, R

EN15 Number of species on the IUCN Red List and in national conservation lists with habitats in areas aff ected by operations, described by the level of endangerment.

83 R

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 113

EMISSIONS, EFFLUENTS AND WASTE

INDICATOR TOPIC PAGE AUDIT/ REVISION

EN16 Total direct and indirect emissions of greenhouse gases, by weight. 78, 79 R, R

EN17 Other relevant indirect emissions of greenhouse gases, by weight. 79 NA

EN18 Projects to reduce greenhouse gas emissions and the reductions obtained. 79 R

EN19 Emissions of substances that destroy the ozone layer, by weight. 78 NA

EN20 NOx, SOx and other significant air emissions, by type and weight. 79 R

EN21 Total water disposal, by quality and destination. 78 R

EN22 Total weight of waste, by type and disposal method. 78, 79 R, R

EN23 Number and total volume of significant spills. 79, 80 R, R

EN24 Weight of transported, imported, exported or treated waste considered hazardous in terms of the Basel Convention - Annexes I, II, III and VIII, and percentage of waste shipments transported internationally.

79 R

EN25 Identification, size, protection status and rate of biodiversity of water bodies and related habitats significantly aff ected by water disposal and drainage undertaken by the reporting organization.

76, 77 R, R

PRODUCTS & SERVICES

INDICATOR TOPIC PAGE AUDIT/ REVISION

EN26 Projects to mitigate environmental impacts of goods and services and the extent of reducing these impacts. 85, 86, 87 R, R, R

EN27 Percentage of recovered products and their packaging in relation to the total products sold, by product category. 86 R

CONFORMITY

INDICATOR TOPIC PAGE AUDIT/ REVISION

EN28 Monetary value of major fines and total number of non-monetary sanctions resulting from non-conformity to laws and environmental regulations.

74 R

TRANSPORTATION

INDICATOR TOPIC PAGE AUDIT/ REVISION

EN29 Major environmental impacts from transporting products and other goods and materials used in the organization’s operations, as well as transporting workers.

86 R

GENERAL

INDICATOR TOPIC PAGE AUDIT/ REVISION

EN30 Total investments and expenses in environmental protection by type. 68, 84 R, R

SOCIAL

INDICATOR TOPIC PAGE AUDIT/ REVISION

Information about management method. 16 R

PERFORMANCE INDICATORS REFERRING TO LABOR PRACTICES AND DECENT WORK

EMPLOYMENT

INDICATOR TOPIC PAGE AUDIT/ REVISION

LA1 Total workers, by type of job, labor contract and region. 44, 45 R, R

LA2 Total number and turnover of employees, by age group, gender and region. 45, 51, 63 R, R, R

LA3 Benefits off ered to full-time employees that are not off ered to temporary or part-time employees, listed by the principal operations.

52 R

GOVERNANCE-WORKER RELATIONS

INDICATOR TOPIC PAGE AUDIT/ REVISION

LA4 Percentage of employees covered by collective bargaining agreements. 54 R

LA5 Minimum deadline for notifying in advance operating changes, including if this procedure is specified in collective bargaining agreements.

55 R

OCCUPATIONAL HEALTH AND SAFETY

INDICATOR TOPIC PAGE AUDIT/ REVISION

LA6 Percentage of employees represented in formal safety and health committees, consisting of administrators and workers, who help in monitoring and advising about occupational health and safety programs.

47 R

LA7 Rates of injury, occupational disorders, days lost, absenteeism and deaths relating to occupation, by region. 48, 49 R, R

LA8 Programs of education, training, counseling, risk prevention and control in progress to help employees, their relatives or members of the community in relation to serious diseases

26, 47, 48 R, R, R

LA9 Topics relating to safety and health covered by formal agreements with unions. 46 R

APPENDICES

114

TRAINING AND EDUCATION

INDICATOR TOPIC PAGE AUDIT/ REVISION

LA10 Average hours of training a year, per employee, listed by job category. 52 R

LA11 Programs for skills management and ongoing learning that support the continuity of the employability of the employees and to manage the end of career.

52 R

LA12 Percentage of employees who regularly receive appraisals of performance and career development. 52 R

DIVERSITY AND EQUAL OPPORTUNITIES

INDICATOR TOPIC PAGE AUDIT/ REVISION

LA13 Composition of groups responsible for corporate governance and description of employees by category, in accordance with gender, age group, minorities and other diversity indicators.

62 R

LA14 Proportion of basic wage between men and women, per job category. 61 R

SOCIAL PERFORMANCE INDICATORS FOR HUMAN RIGHTS

PRACTICES OF INVESTMENT AND PROCUREMENT PROCESSES

INDICATOR TOPIC PAGE AUDIT/ REVISION

HR1 Percentage and total number of significant investment contracts that include clauses referring to human rights or were assessed with reference to human rights.

37 R

HR2 Percentage of companies contracted and crucial suppliers that were assessed with reference to human rights and measures taken.

37 R

HR3 Total hours of training for employees in policies and procedures relating to aspects of relevant human rights for operations, including the percentage of employees who received training.

38 R

NON-DISCRIMINATION

INDICATOR TOPIC PAGE AUDIT/ REVISION

HR4 Total number of cases of discrimination and the measures adopted. 61 R

FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING

INDICATOR TOPIC PAGE AUDIT/ REVISION

HR5 Operations identified in which the right to freedom of association and collective bargaining may be running considerable risk and the measures taken to support this right.

54 R

CHILD LABOR

INDICATOR TOPIC PAGE AUDIT/ REVISION

HR6 Operations identified as being of significant risk of child labor and the measures taken to contribute to abolishing child labor. 58 R

FORCED OR SLAVE LABOR

INDICATOR TOPIC PAGE AUDIT/ REVISION

HR7 Operations identified as being of significant risk of forced or slave-like labor and the measures taken toward eradicating such forced or slave labor.

57 R

SAFETY PRACTICES

INDICATOR TOPIC PAGE AUDIT/ REVISION

HR8 Percentage of safety personnel trained in the organization’s policies or procedures relating to aspects of human rights that are relevant to the operations.

39 R

INDIGENOUS RIGHTS

INDICATOR TOPIC PAGE AUDIT/ REVISION

HR9 Total number of cases of violating rights of the indigenous peoples and measures taken. 24 R

WWW.PETROBRAS.COM | SOCIAL AND ENVIRONMENTAL REPORT 2007 115

INDICATORS OF SOCIAL PERFORMANCE REFERRING TO SOCIETY

COMMUNITY

INDICATOR TOPIC PAGE AUDIT/ REVISION

SO1 Nature, scope and eff ectiveness of any program and practice to assess and manage the impacts of operations on the communities, including admission, operation and departure.

24, 25 R, R

CORRUPTION

INDICATOR TOPIC PAGE AUDIT/ REVISION

SO2 Percentage and total number of business units assessed for risks relating to corruption. 100 R

SO3 Percentage of employees trained in the organization’s anti-corruption policies and procedures. 101 R

SO4 Measures taken in response to cases of corruption. 102 R

PUBLIC POLICIES

INDICATOR TOPIC PAGE AUDIT/ REVISION

SO5 Positions toward public policies and participation in preparing public policies and lobbies. 101 R

SO6 Total value of financial contributions and in kind to political parties, politicians or related institutions, listed by country. 100 R

UNFAIR COMPETITION

INDICATOR TOPIC PAGE AUDIT/ REVISION

SO7 Total number of lawsuits against unfair competition, trust and monopoly practices and their results. 99 R

CONFORMITY

INDICATOR TOPIC PAGE AUDIT/ REVISION

SO8 Monetary value of significant fines and total number of non-monetary sanctions resulting from non-conformity to laws and regulations.

99 R

PERFORMANCE INDICATORS FOR PRODUCT LIABILITY

HEALTH AND SAFETY OF CLIENT

INDICATOR TOPIC PAGE AUDIT/ REVISION

PR1 Stages in the life cycle of goods and services in which the impacts on health and safety are assessed with view to improvement and the percentage of goods and services subject to such procedures.

98 R

PR2 Total number of cases of non-conformity to regulations and voluntary codes relating to impacts caused by goods and services on health and safety during the life cycle, listed by type of result.

98 R

LABELING OF GOODS AND SERVICES

INDICATOR TOPIC PAGE AUDIT/ REVISION

PR3 Type of information about goods and services required by labeling procedures, and the percentage of goods and services subject to such requirements.

98 R

PR4 Total number of cases of non-conformity to regulations and voluntary codes relating to information and labeling of goods and services, listed by type of result.

98 R

PR5 Practices relating to client satisfaction, including research results that measure this satisfaction. 94, 95 R

MARKETING COMMUNICATIONS

INDICATOR TOPIC PAGE AUDIT/ REVISION

PR6 Programs obeying the laws, regulations and voluntary codes related to marketing communications, including advertising, promotion and sponsorship.

95 R

PR7 Total number of cases of non-conformity to regulations and voluntary codes relating to marketing communications, including advertising, promotion and sponsorship, listed by type of result .

98 R

CLIENT PRIVACY

INDICATOR TOPIC PAGE AUDIT/ REVISION

PR8 Total number of proven complaints relating to violation of privacy and loss of client data. 98 R

CONFORMITY

INDICATOR TOPIC PAGE AUDIT/ REVISION

PR9 Monetary value of fines (significant) for non-conformity to laws and regulations relating to the supply and use of goods and services.

98 R

APPENDICES

116

LIMITED ASSURANCE REPORT BY INDEPENDENT AUDITORS

To

Board of Directors and Shareholders of

Petróleo Brasileiro S/A

Rio de Janeiro - RJ

Introduction

We have been hired to apply limited assurance pro-

cedures to the Social and Environmental Report

of Petróleo Brasileiro S/A (Petrobras) for the year

ended December 31, 2007, prepared under the

responsibility of Petrobras. Our responsibility is to

issue a limited assurance report on this Social and

Environmental Report.

Limited assurance procedures

Limited assurance procedures were adopted in accor-

dance with Standard NPO1 issued by the Brazilian

Institute of Independent Auditors (IBRACON), and

ISAE 3000 (International Standard on Assurance

Engagements) issued by the International Auditing

and Assurance Standards Board, both for assurance

work that is not an audit or review of past financial

information. The procedures consist of (a) planning

the work, considering relevance, coherence, volume

of quantitative and qualitative information and oper-

ating and internal control systems that are the basis

for drafting the Petrobras Social and Environmental

Report; (b) understanding the methodology for calcu-

lating and consolidating the indicators by interviewing

managers responsible for collecting information; (c)

comparison by samples of the quantitative and quali-

tative information with the indicators mentioned in

the Social and Environmental Report; and (d) com-

parison of the fi nancial indicators with the fi nancial

statements and/or accounting records.

Reporting criteria and restrictions

The information in the Petrobras Social and

Environmental Report was prepared using the Global

Reporting Initiative (GRI G3) guidelines for social and

environmental reports.

The purpose of our work is limited assurance

of information about the form of management and

performance indicators of the Petrobras Social and

Environmental Report, not including assessment of

the suitability of its related policies, practices and per-

formance. The necessary procedures for limited assur-

ance were applied, which do not involve examination

in terms of audit standards of the fi nancial statements.

Moreover, our report does not provide limited assur-

ance on the scope of future information (such as, for

example, targets, expectations and ambitions) and

descriptive information under subjective assess-

ment. Therefore, certain information contained in

the Social and Environmental Report was not audited

or revised and is identifi ed as “unaudited/unrevised”

in the Indicator Matrix.

Conclusion

Based on our revision, we know of no fact that leads

us to believe that the information on form of manage-

ment and performance indicators in the Petrobras

Social and Environmental Report for the year ended

December 31, 2007, is not prepared in accordance

with the aforementioned guidelines.

May 20, 2008

KPMG Independent Auditors

CRC-SP-14.428/O-6-F-RJ

Manuel Fernandes Rodrigues de Sousa

Accountant CRC RJ - 052.428/O-2

Alexandre Heinermann

Accountant CRC 1SP228.175/O-0-S-RJ

STAFF

HEAD OF INFORMATION

Wilson Santarosa

Executive Manager for Institutional Communication

Marcos Menezes – Contador (CRC-RJ 35.286/0-1)

Executive Manager for Accounting

DRAFTING PETROBRAS CONTENT

Luis Fernando Nery

Social Responsibility Manager

Sue Wolter Vianna

Sector Manager for Guidelines and

Practices of Social Responsibility

Ana Paula Grether Carvalho

Petrobras Social and Environmental Report Coordinator

EDITING

Adriano Lima

TEXT

Bruno Moreira Cazonatti and Flávia Fuini Pessa

TEAM

Alyne de Castro Costa, Anamaria Miranda Rodrigues Ballard, Dorival

Correia Bruni, Flavia Rodrigues Cereijo, Ingrid Gomes Louro, Juliana

Moreira, Rebecca Jaccoud Ribeiro Amaro and Wilson Jacintho

Magalhães

COLLABORATORS

Ademilton Gomes da Silva, Adriana Ayer, Adriana Leonel Almeida,

Aff onso Paulo Gilano de Mello, Alayde Nunes Americano, Alessandra

Maria Rodrigues Cordeiro, Alessandro Antunes Leandro, Alex

Guimarães Lourenço, Alexander Piaza Fialho, Alexandre Borges,

Alexandre dos Santos, Alexandre Guilherme Glitz, Alexandre Rocha

Cunha Campos, Alexandre Schmidt, Alice Ribeiro Vianna, Aline de

Carvalho Meira, Alvaro Evangelista Sales, Amal Mabruk Daredi, Ana

Amelia de Souza Acuy, Ana Cristina Felipe, Ana Cristina Fernandez

Botelho Martins, Ana Cristina Nogueira Duarte, Ana Lucia de Almeida

Hugo Braga, Ana Lucia Villas Boas, Ana Luiza Sabóia de Freitas, Ana

Margarita Carrasquero, Ana Paula de Moura Albuquerque, Ana Paula

Fernandes Pinto, Ana Paula Gaspar Marques, Ana Paula Pires Costa,

Ana Paula Rocha Couto, Ana Paula Vieira Fernandes, Anderson

Pinheiro Correia, André de Paula Schubert, Andréa de Campos

Cypriano Mocciaro, Angela Maria de Pádua, Angela Martins de Souza,

Anna Paula Gomes dos Santos, Antonio Biraci de Oliveira, Antonio

Carlos de Lemos Oliveira, Antonio Carlos Marques Pinheiro, Antonio

Carlos Pires Monteiro, Antonio Ezequiel Rodriguez, Antonio Gomes

Moura, Antonio Luiz Peres, Antonio Mauricio Carreira, Augusto José

Leite Mendes Riccio, Augusto Masini, Ayri de Medeiros Trancoso

Junior, Barbara Prates Carpeggiani, Blanche Campanate de Oliveira

Pombo da Paz, Bruno Carvalho Baruqui, Bruno Cesar Ladeira, Carina

Guadalupe Cavallo, Carla Viviane Pereira Fontes, Carlos Alberto de

Macena Ferreira, Carlos Alberto Gonçalves Rosa, Carlos Castro Cabral

de Macedo, Carlos de Sousa Castro Gonzalez, Carlos Dorian da Silva

Moreira, Carlos Henrique Vieira Cândido da Silva, Carlos Leonam

Mendes dos Reis, Carlos Natividade Quinteiro, Carmen Lia Magalhães

Ramos, Cassia Maria Nocchi Vieira, Cássio Figueiredo Lopez, Celso

da Frota Braga, Celso Yoshihito Murakami, Christiane Pimentel Duar

Barbosa, Cíntia Imbuzeiro Duarte Bodstein, Ciro Davi Galdino Ribeiro,

Clarissa Goulart de Bem, Clarisse Duarte de Meireles, Claudete

Roseno de Castro, Claudia Del Souza, Claudia Valéria Rogerio Almeida,

Claudio Eduardo Nunes Peroba, Claudio Francisco Negrão, Claudio

Henrique Dias Guimarães, Cleanete Mendonça Gomes Granado,

Cristiane Holanda Moraes, Cristiano Boaventura Duarte, Cristiano

Carvalho Alves, Cristina Guerreiro de Menezes, Danielly Leonardo

da Cunha Maciel, Danilo Souza Chaves, Delio Augusto Ibarra Ayala,

Denise Rosário, Dercílio João Machado da Fonseca, Deusdedith de

Souza Alves Filho, Diana Sam Oblitas, Donald Macedo da Fé, Douglas

Hamilton Santos Lobo, Edgar Strauss Junior, Edson Ricardo Soares

Pereira da Cunha, Eduardo Cesar Moreno, Eduardo Damazio da Silva

Rezende, Eduardo Macedo Barbosa, Eduardo Manoel Cavalcanti, Ek

Antonio Pereira de Freitas, Elaine Blanco Dias, Elena Martinis, Eliana

Rodrigues Araújo, Emre Ozmen, Enock Jabes do Nascimento Santos,

Ericka Liz Santos Lemos, Ernani Turazzi, Ernesto Mendes Ferreira,

Eros Braga de Albergaria, Evanya Maria Maciel, Everaldo Inácio

Ferreira, Fabiana Abrahão, Fabiane Madeira, Fabio Augusto Parreira

Reis, Fabricio Niquén Espejo, Fabrício Teixeira Zorzanelli, Fernando

Albano Carriço, Fernando Jorge Mourão Maio, Fernando Jorge Santos

de Oliveira, Fernando Sergio Barros de Mello, Flavia do Nascimento

Reis dos Santos, Flavia Figueira Menezes, Flavia Nascimento de Melo,

Flavia Renata Souza Conrado Nobre, Flavia Vianna Fagundes, Flavio

Ferreira da Silva, Flávio Torres L. da Cruz, Flor Arlette Santamaría

Marín, Franklin Teodoro Veja, Frederico Guilherme Bins, Gabriela

Xavier Maia, Gianfranco Ceccolini, Gilberto Alves, Gilmar de Souza

Aquino, Gisele Cristina de Oliveira Leite, Gláucia Aparecida de Lima

e Silva, Glenda Rangel Rodrigues, Guido Eduardo Bassoli, Guilherme

Amorim Braga, Guilherme Luis Megassi Leoni, Guilherme Pinto

Nazar, Gustavo André Dunzer, Heitor Rezende de Carvalho, Helenice

Menegatti de Carvalho, Hélio de Castro Domingues Filho, Heloisa

Tolentino de Carvalho Brazão Gomes da Silva, Herlan Adaes Pereira,

Hermano Mesquita Mendes, Hernani Leonardo Mendes, Hernani

Macedo Fortuna, Hilka Flavia Saldanha Guida, Hudison de Assis

Martins Junior, Hugo Leunis Queiroz Alves, Hyandra Ribeiro, Iatiara

Conceição Ferreira da Silva, Ignácio Aoki Junior, Ítalo Reis da Silva,

Ivan Aximoff Filho, Ivonildo Siqueira Botelho, Jair Gomes Silva, Jairo

dos Santos Junior, Janaína Marques Bezerra, Jane Maria do Rosário

Gomes de Santana, Jayme de Seta Filho, Jenny Rocio Trujillo Gordillo,

João Luiz Suarez de Araújo, João Norberto Noschang Neto, Jonilson

Silveira, Jorge Antonio Tavares de Oliveira, Jorge Cabral de Oliveira,

Jorge Luiz Coutinho Bezerra, José Alberto Camarinha Loureiro, José

Arilson Pinheiro de Albuquerque, Jose Blanco Ferreiro, José Claudio

Gemaque da Silva, José de Medeiros Leite, Jose Flávio Eleuterio

Gomes, José Geraldo de Souza Carvalho, José Joaquin Guzman,

José Laurindo de Farias, José Luciano de Brito Seabra, José Luiz de

Oliveira Reis, José Luz de Almeida, José Pedro de Sousa, Joseana

Borguez Tonon, Juan Eduardo Borelli Thode, Juçara de Oliveira

Ribeiro, Juliana da Costa Mattoni Rocha, Juliane Aguilar, Juliano

Vargas de Oliveira, Julio Cesar da Costa Cominges, Julio Cezar

Jeronimo dos Santos, Karina Cox Hollos, Kelly Cristina Pinto Silva, Laís

de Farias Leal de Almeida, Larissa Yumi Campoi, Lauro Matos da

Cruz, Leandro Nildo Pfaff enzeller, Lenice Dantas de Araújo, Leonardo

Ottolini, Leonina Avelino Barrosa de Oliveira, Libertad Maria Gutierrez

Torres, Lincoln Antunes Weinhardt Dalcomuni Ferreira, Lindoneide

Lima Paredio, Liza Ramalho Albuquerque, Lorena Silvia Perez,

Luciana Moraes Carvalho, Luciana Renna Alves, Luciano Claudio

Lage Guimarães Mendes, Luciléa Ribeiro de Carvalho, Lucinéia

Freitas dos Santos, Lucio Flavio Costa Melo, Lucíola Gomes Ciolette,

Luis Cesar Stano, Luis Molle Junior, Luis Monte Jacintho, Luis Roberto

Dantas de Santana, Luiz Amaury Rediguieri, Luiz Arthur Silva de Faria,

Luiz Autran Pires Ribeiro, Luiz Carlos Freitas Araújo, Luiz Fernando

Toledo de Souza Leal, Luiz Gonzaga do Nascimento, Luiz Henrique

Nogueira, Luiz José Ribeiro Junior, Luiza Fernandes Bairral, Luzia Cruz

Pereira, Manoel João Castro de Miranda, Marcela Fernando Duarte

Lucas, Marcela Lino Rodrigues, Marcelle Karine de Oliveira, Marcello

Nunes Brandão, Marcelo Abdo Fuad Curi, Marcelo Fontenelle Ribeiro,

Márcia Amaral Estevão dos Santos, Márcia Bartolini, Márcia Moura

Vieira, Márcio José de Macedo Dertoni, Marco Antonio B. da Silva,

Marco Aurélio da Rosa Ramos, Marco Aurélio Lemos Latgé, Marco

Aurélio Nogueira de Souza, Marcos André Lessa, Marcos Rodrigues

Viana, Marcos Vinicius de Oliveira, Marcos Vinicius Marques da Silva,

Maria Clarisse Dias Furlani, Maria Cláudia Guimarães Grillo, Maria

de Lisieux Cardoso, Maria Dilcinéa Vasconcelos Avelino, Maria

Esther Fernandes Soares, Maria Filomena Andrino Anca, Maria Júlia

de Fátima Walter, Maria Lúcia Assis, Maria Lucinda de Melo, Maria

Náustria de Albuquerque, Maria Regina Madeira da Costa, Maria

Rosane Tavares Lima, Maria Soledad Recalde Yepez, Mariano de

Oliveira Moreira, Marilene Corrêa, Marilza Teixeira de Oliveira, Marina

Nery da Mota, Marinez Donato Borgerth Teixeira, Marta Rotstein,

Maurício César Barreto Viana, Maurício Duppre de Abreu, Mauro

Jesus Oliveira, Mauro Martinez Márquez, Mauro Medina da Silva, Max

Simon Gabbay, Michelle Ferreti, Miguel Ângelo Estephanio, Milena

Rosa Lobato, Milton Carneiro Lacerda Filho, Mônica Cruz Vicencio,

Mônica Moreira Linhares, Mônica Rodrigues Monteiro, Monique

Fernandes Freire, Mylene Ferreira, Nádia Ferreira da Silva, Nagib

Albuquerque Said, Nancy Gomes do Santos, Natália Maria Barbieri,

Náthali Soares Rodrigues Pereira, Nelma Xavier Gomes, Nelson

Mathias, Ocleia Gomes de Araújo, Osaretin Aina Salami, Patrícia Alves

de Carvalho, Patrícia de Macedo Anjos, Patrícia de Oliveira, Paulo

César Dias Pará, Paulo Dagoberto Buys Gonçalves, Paulo José Titara

Mendes, Paulo Leonardo Marinho Filho, Paulo Roberto Lopes Ferraz,

Pedro Frederico de Almeida Benac, Pedro Henrique Salgado Chrispim,

Pedro Pereira de Paula Neto, Plauto Porto Peixoto, Priscila de Souza

Costa Couto, Priscilla Dias Alves Rodrigues Diniz, Priscila Iglesias Rosa,

Rafael Andraschko, Rafael Henrique Barduni Costa, Ramon Sosa,

Raquel Borba Balceiro, Raquel Freitas Pessoa, Raul Martins Gomes

de Paiva, Regina Célia Bella, Regina Helena Howat Rodrigues, Regina

Junqueira Soares Brandão, Reinaldo da Silva Duarte, Renata Fabiana

Barros dos Anjos Borre, Renata Gaspar Rodrigues Silva, Rita de Cássia

Mouzer Landa Noronha, Rita de Cássia Pereira Fagundes Netto, Rita

de Cássia Pires da Silva, Roberta de Paula Farias Costa, Roberto

Alfradique Vieira de Macedo, Roberto César Pugliesi Portella, Roberto

de Faria Vieira, Roberto Jorge Pinheiro Moreira, Roberto Vieira, Rocio

Del Pilar Galiano de Boccia, Rodrigo Peres Lobo, Rodrigo Tamarozi,

Rogério Canto de Andrade Rosado, Ronaldo Dreyer Bressane,

Rosângela Moraes Cezar, Rosanges Martins da Costa, Rosidea

Viana da Silva, Rosilene Silva, Rozana Aparecida Caran, Rozângela

Pinto Rezende Sette, Rozanir Martinho Correa, Rubem Antônio de

Lima Costa, Ruth Martins de Castro, Sabrina Alonso de Souza Arbs,

Salvador Abuche Coyunji Junior, Sandra Assumpção Ramos, Sandra

de Jesus Oliveira Faria, Sergio Casaes Lamenha Lins, Sergio Luiz

da Silva Quintão, Sérgio Pereira dos Santos, Sergio Rossato, Sheila

Rodrigues da Fonseca Lage, Shirley Félix Fernandes, Sidney Machado

Silva, Silvana de Souza Werneck, Silvio Luiz Cruz Martins, Sofia

Varejão Filgueiras, Solange de Araújo Silva, Solange Silva, Solimar

Batista de Melo, Sônia Maria Nascimento de Santana, Sonia Martins

Brito, Sylvia Bello, Telma Oliveira do Prado, Telma Regina Simões

Castello Branco, Tercio Dal Col Sant Ana, Teresa Gonçalo da Silva,

Teresa Rachel Simões Paz, Tereza Cristina França, Thea Maria Vieira,

Thiago de Melo Rezende, Tom Zé Moreira Nobre, Ubiratan Jorge

Stavola de Menezes Pereira, Valéria Aparecida Correia Roldão, Valéria

de Paiva e Silva, Valeska da Rocha Caff arena, Valmir Gomes da Rocha,

Valmir Pires de Almeida, Vanderson Lopes Felix da Silveira, Vanessa

Burjack Maranhão Gomes de Sá, Vânia Lima de Menezes, Vânia

Resende Carapiá, Vera Green, Vilmar Augusto A. Miranda, Vinícius

Bastiani, Vivaldo Taliule Junior, Viviane Vieira Fernandes, Wanderley

Antunes Bezerra, Willer Borges Lins Junior, William Jerônimo de

Oliveira, Zuneide Altoé.

PRODUCTION

Gilberto Puig

Relations Manager

Patrícia Fraga de Castro e Silva

Multimedia Sector Manager

Tereza Lobo, Joviano Rezende and Thais Ravicz

Team

Tabaruba Design

Design

Publicom Assessoria de Comunicação

Editorial Production

Elvyn Marshall

English translation and proofreading

Ipsis Gráfica e Editora

Printing

PHOTOGRAPHS

Petrobras Image Base, André Valentim, Bruno Veiga,

Claudia Ferreira, Felipe Goifman, Fernando

Bergamaschi, Geraldo Falcão, José Caldas, Juarez

Cavalcanti, Roberto Rosa, Rogério Reis, Thelma Vidales

Cover: Leaf (Keystone/ Petrobras Image Base)

Contents: A Kaingang woman working with basketry

handicraft in Londrina, Paraná (Felipe Goifman)

Pages 4 and 5: Area of environmental protection in Duque de

Caxias refinery – Rio de Janeiro (José Caldas)

Pages 14 and 15: Fisherman in the Peispa project for improving

the quality of life of the artisan fishermen in Saquarema,

Rio de Janeiro State (Patricia Santos)

Pages 22 and 23: Working with young people from the Quixote

project in São Paulo (Quixote project release)

Pages 42 and 43: Chemical technique in laboratory in

Landulpho Alves refinery, Bahia (Claudia Ferreira)

Pages 66 and 67: Diver from the Tamar Project (Tamar project

release)

Pages 92 and 93: Local community watches the films

produced in the workshop of the Mocoronga Popular

Communication Network Project, Pará (Bruno Veiga)

Coordination of the Petrobras Social

and Enviromental Report

Sector Management for Guidelines and

Practices in Social Responsibility

balancosocial@petrobras.com.br

Av. República do Chile, 65 – Sala 1202

Centro, Rio de Janeiro, RJ Brasil

20031-912

Report printed on Suzano Reciclato paper (100% recycled from scrap paper, 35% a� er and 65% before consumption), with ink made from renewable oilseed-based raw materials with heavy metal-free pigments, under the ISO 18000 standard.

SOCIAL ANDENVIRONMENTAL REPORT

SOCIAL AND ENVIRONMENTAL REPORT 2007 // WWW.PETROBRAS.COM

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