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About Ecopetrol1Integratedsustainablemanagementreport2012

2Ecopetrol S.A.Corporate Communications UnitCorporate Social Responsibility UnitEditing:Alexandra SantamaríaMaría del Pilar JaramilloJuan Guillermo LondoñoAriel Suárez GómezTestimonies and practice:Diego Hernán CárdenasGRI Report Consultancy:Octopus ConsultoresSantiago de Chileinfo@octopusconsultores.clGRI contact point - Ecopetrol:Ariel Suárez Gómezreportedesostenibilidad@ecopetrol.com.coDesign and layout:Gatos Gemelos Comunicaciónwww.gatosgemelos.comPrinting:OP Gráficaswww.grupoopgraficas.comPhotographs:Ecopetrol Photo BankNational Biodiversity Call Photo BankClemencia BáezCME - Security and Human RightsBogotá, March 2013Ecopetrol S.A.Carrera 13 No. 36-24Telephone: +57 1 234 4000Bogotá, Colombiawww.ecopetrol.com.co

Integratedsustainablemanagementreport2012

000-33Contents

4Board ofDirectorsStanding, from left to right:Jorge Gabino Pinzón SánchezRoberto Steiner SampedroMauricio Santamaría SalamancaAmilcar Acosta MedinaLuis Carlos Villegas EcheverriSeated, from left to right:Joaquín Moreno UribeFederico Rengifo VélezFabio Echeverri CorreaMauricio Cárdenas Santamaría

About Ecopetrol5Steering CommitteeStanding, from left to right:Jaime Pineda DuránStrategic Supply DepartmentCarlos Eduardo Zamudio RojasShared Service Center DepartmentHernando Zerda NoriegaVice Presidency of Strategy and Growth (e)Alvaro Castañeda CaroVice Presidency of Transportation and LogisticsHéctor Manosalva RojasExecutive Vice Presidency of Exploration andProductionMauricio Echeverry GutiérrezLegal Vice PresidencyJavier Genaro Gutiérrez PemberthyPresidencyEnrique Velásquez CoversVice Presidency of ExplorationÉdgar Eduardo Rey VelandiaInternal Audit DepartmentÓscar Alfredo Villadiego MedinaVice Presidency of HSE and Operational SustainabilityHéctor Castaño AristizábalVice Presidency of ProductionRafael Ernesto Guzmán AyalaTechnical Vice Presidency of Exploration and ProductionDevelopmentSeated, from left to right:Adriana Marcela Neira LondoñoDisciplinary Control OfficeFederico Maya MolinaVice Presidency of Refining and PetrochemicalsNéstor Fernando Saavedra TrujilloVice Presidency of Innovation and TechnologyClaudia Castellanos RodríguezVice Presidency of Supply and MarketingMargarita Obregón TrianaSecretary GeneralPedro Alfonso Rosales NavarroExecutive Vice Presidency of DownstreamJuan Felipe Múnera YepesVice Presidency of Corporate Finance (e)Martha Cecilia Castaño GutiérrezVice Presidency of Human Talent

6Main developments 20121 2 3 4Standing out werethe discoveries inTisquirama East-1,Embrujo 1 in theCaño Sur block,and the presenceof hydrocarbons inthe Aullador well inMagdalena Medio.Two discoverieswere made inthe in the Gulfof Mexico of theUnited States:Parmer andDalmatian South.The oil and gasproduction ofEcopetrol andits affiliatesincreasedby 4.1% andreached 754,000barrels of oilequivalent perday.The ANH awardedus 12 explorationblocks inColombia, in the2012 round, andpartnershipswere sealedwith world-classcompanies suchas ExxonMobil,Repsol andAnadarko.The process wascompleted to ensurethe delivery of dieselwith less than 50parts per million ofsulfur to 100% of thecountry from January2013. This milestonemakes us leaders inclean fuels in LatinAmerica.

About Ecopetrol75 6 7We expandedourcommercialborders.We signeda contractto export12 millionbarrels ofCastilla crudeto India forone year.Cenit was born,a company thatwill providetransportand logisticsservices forhydrocarbonsand refinedproductsthroughout thecountry.Ecopetrol wasratified for thesecond yearrunning inthe Dow JonesSustainabilityWorld Index. Wewon the Make-America awardfor knowledgemanagementand achieved21 patentsfor newtechnologicaldevelopments.8We continuesustainedimprovement ofHSE indicators(health,safety andenvironment).The accidentfrequency rate(accidents /million manhours)fell to 0.79compared with1.02 recorded in2011.9We occupyfirst place inthe rankingof the mostreputablecompanies inthe country,according toCorporateReputationMonitor(Merco) andare ranked14th amongthe bestperformingenergycompaniesin the worldaccording toPlatts.

8Ecopetrol in figures 2012FinanceOperating incomeBillion $20082009201020112012Source: Ecopetrol S.A.ExportsVolumeFigures in Kbcd2008200920102011201232.727.636.656.459.5216302370493521Operating profitBillion $20082009201020112012Source: Ecopetrol S.A.ValueFigures in MUS$2008200920102011201212.88.113.224.323.06,0045,82511,42016,06219,127Final MER 2012: $1,797ExplorationEbitdaBillion $Net profitBillion $Ecopetrol SeismicFigures in Equivalent KmA3 WellsQuantity200820092010201114.710.416.428.1200820092010201111.65.28.315.420082009201020115,6339,543 *15,961 *5,516 * 200820092010201115161921201227.5201215.0* Corporate Group* Corporate Group, Wells A3 and A2FuelsRefining (includes Cartagena)Gasoline salesFigures in BodDiesel salesFigures in BodLoads to refineriesKbcdGross refiningmarginUS$/bl2008 71,530 2008 97,330 2008310.1 20084.4720092010201168,99072,940 *74,500 *20092010201199,730100,580 *109,000 *200920102011295.9293.0302.82009201020114.397.558.9220122012* Includes Reficar* Includes Reficar2012 20121,655 32 *2012 2012294.0 9.47

About Ecopetrol9ProductionCrude and gasowned by EcopetrolFigures in KboedTotal crudeowned by EcopetrolKbodReservesCrude and gasUnder SEC methodology and prices *Cifras en MbpeReplacement rateEcopetrol ReservesFigures in %2008200920102011* Corporate Group447520616 *724 * 20082009201020113624264825692012 2012754 * 591200820092010201120121,1371,5381,7141,8571,877*Does not include royalties2008200920102011201246351193164109AbbreviationsMboe. Million barrels of oil equivalentKbode. Thousands of barrels of oil a day equivalentKbod. Thousands of barrels of oil a dayMcfd. Million cubic feet per dayTransportVolumes of crudetransportedKbcdVolumes of refinedproducts transportedKbcdEnvironmentalinvestmentEnvironmental investmentEcopetrol TotalMillion $SocialinvestmentSocial investmentEcopetrol TotalMillion $ContractingEcopetrolcontractingBillion $2008200920102011542.3576.2770.91,204.02008200920102011209.5223.3264.9289.02012 20121,218.0 302.02008200920102011507,821611,775988,2841,310,00020121,160,771Source: Ecopetrol S.A.2008200920102011125,803135,638159,053214,1232012304,500200820092010201120127.29.611.114.515.2

16ProfileWith 61 years of history, Ecopetrol is the largest company inColombia and is an integrated oil and gas sector company, andis involved in all stages of the hydrocarbon chain: exploration,production, marketing and processing into fuels and higher valueaddedproducts such as petrochemicals.Teca Field

About Ecopetrol17The company has hydrocarbon extraction fields incentral, southern, eastern and northern Colombia,two refineries, ports for the export and import offuels and crude on both coasts, and a transportnetwork of pipelines and poliducts throughout thenational territory, which connect the productionsystems with major consumption centers andmarine terminals.It has an significant stake in the biofuels businessand through its international investments made inrecent years, has a presence in Brazil, Peru and theGulf of Mexico (USA).important rankings. Also, according to the 2012ranking by Platts, it holds 14th place among the bestperforming energy companies in the world, andfourth place in the Americas.Ecopetrol is a mixed economy company, of acommercial nature, organized as a corporation, isnational, linked to the Ministry of Mines and Energyin accordance with the provisions of Law 1118of 2006, and governed by the Bylaws containedin Public Deed No. 5314 of December 14, 2007,granted in the Notary Two of the Notary Circle ofBogotá D.C.It is today among the 40 largest oil industrycompanies in the world, occupying 38th positionin 2012 according to PIW, one of the world’s mostHydrocarbonextraction fieldsRefineries3Ports for the exportand import of fuelsOil pipeline andpoliduct transportnetworkInternationalpresence1. Brazil2. Peru3. Gulf of Mexico21

18Associations, Societiesand Voluntary InitiativesThe various associations, societies and voluntary initiatives thatEcopetrol supports are related to both the core business, as well asthose that support its sustainability.Regional Associationof Oil and NaturalGas Companiesin Latin Americaand the Caribbean(ARPEL, for itsacronym in Spanish)COCME –Colombian WECCommitte (WorldEnergy Council)ColombianAssociation ofNatural Gas(Naturgas)Society ofPetroleumEngineers (SPE)ColombianAssociationof PetroleumEngineers (ACIPET,for its acronym inSpanish)National Federationof Biofuels(Fedebiocombustibles)Clean Caribean& AmericasProfessional Councilof PetroleumEngineeringColombian SafetyCouncilRegisteredEducationProvider (REP)del PMI® (ProjectManagementInstitute)Colombian Societyof EngineersColombian Instituteof TechnicalStandards(ICONTEC)

About Ecopetrol19Energy andGas RegulatoryCommission (CREG,for its acronym inSpanish)Mining and EnergyCommittee (CME,for its acronym inSpanish)Global ReportingInitiative (GRI)– OS Category(OrganizationStakeholders)Oil CompaniesInternational MarineForum (OCIMF)Guías Colombiafor Human Rightsand InternationalHumanitarian LawAssociation ofCertified FraudExaminers (ACFE)Associationfor Safety andCorporate RiskManagement inMansilla (ASGREM,for its acronym inSpanish)ColombianBusiness Councilfor SustainableDevelopmentAssociation(CECODES)Ethics & ComplianceOfficer Association(ECOA)Constructors withOrganizationalResponsibility andEthics (CREO, for itsacronym in Spanish)Local GlobalCompact Networkin ColombiaCorporationAssociation ofCertified Anti-Money LaunderingSpecialists(ACAMS)

20Awards andrecognition 2012The seven main distinctions received byEcopetrol in 2012 were:Dow JonesSustainability Index(DJSI ): for the secondconsecutive year Ecopetrolwas included in the DJSI,among the 5% of thecompanies with the bestsustainability performance.Merco Award 2012For the fifth consecutiveyear Ecopetrol tookfirst place in corporatereputation in Colombia, andthe company president,Javier Gutiérrez, washonored as the leader withthe best reputation.

About Ecopetrol21Special Recognition- UNODC, Ministryof Justice and Law,British Embassy, CCB:Ecopetrol was declared abovethe competition for the bestpieces of communicationon the Prevention of MoneyLaundering and the Financingof Terrorism.Accenture Award:Ecopetrol won the first editionof the Accenture InnovationAward Colombia in two forms,both by jury selection andby public vote. The workthat won the award was theorganization’s contribution tothe ”Strategy for hydrocarbonseizure control.”Award for the BestTechnical Work duringEnhanced Oil RecoveryWorkshops:This award was presented toEcopetrol by the ArgentineInstitute of Oil and Gas. Thetheme of the work that receivedthe award was the design,implementation, monitoringand expansion of an enhancedoil recovery process, throughthe injection of colloidaldispersion gels.MAKE AmericasAward (Most AdmiredKnowledge Enterprises):Ecopetrol became the firstColombian company and oneof the first Latin Americancompanies to obtain thisaward, which recognizes theability of organizations totransfer knowledge in order toimprove performance in theiroperational, administrativeand management areas.A jury composed of seniorexecutives from the 500largest companies in the worldaccording to Fortune magazine,as well as recognized leaders inknowledge management andintellectual capital, rated thenominated organizations.Global CompactRecognition:Ecopetrol’s AnticorruptionStrategy was recognized asbest practice by the GlobalCompact Regional Centrefor Latin America and theCaribbean, and was chosenfrom more than 45 casesfrom eight Local Networks.Latin America´sInvestor RelationsAwards (Lira) 2011:Ecopetrol won five awards, aswell as the highest honor withinthis award, which recognizesexcellence in investor relationsand the communication ofcorporate governance bycompanies with a marketpresence.The awards, which are givento companies and executives,are organized by the BOARDInstitute for CorporateGovernance & Strategyalongside Acclaro, an Englishconsultant specializing ininvestor relations.Ecopetrol won in fiveof the 10 categories:Best communication ofcorporate governance; Bestcommunication of financialresults; Best investorrelations department; Bestinvestor relations manager;Best general manager ininvestor relations.The company also wonthe top award, in otherwords the Grand Prixof Investor Relations &Corporate GovernanceCommunications, for itsoutstanding performanceand best practices.

22Certifications andaccreditations 2012Continuing the search for the highest global standards ofsustainability, in 2012 Ecopetrol was certified, recertified oraccredited in the following:ISO 9001, ISO 14000,ISO 14001, GP 1000 andOHSAS 18001Recertification API 653 / AWS / API 510International Risk ManagementCertification – IRMHistorical perspective1951 1970 1983 1989EmpresaColombianade Petróleos(Ecopetrol) isbornReversion ofthe De Maresconcession to theColombian StateRatifies itsnature as a Stateindustrial andcommercialcompanyAdoption of thefirst organicbylawDiscovers theCaño Limónfield (Arauca), inpartnership withOXYDiscovers theCusiana field(Casanare) inpartnershipwith BP1961 1974 1986 1993Assumes directmanagement of theBarrancabermejarefineryBuys theCartagenarefineryColombia againbecomes andoil-exportingcountryDiscovers theCupiagua field(Casanare)

About Ecopetrol23Certification in HOTTAP – TDWCertification in Physical Asset ManagementPASS 55Certification in cost engineering from the Associationfor the Advancement of Cost Engineering (AACE)SMRP Certification in reliability and maintenanceCertification for instrumentation design from theInternational Society of Automation (ISA)CKMO certification – Certified KnowledgeManager Officer2003 2007Becomes a publicstock company(Decree 1760)called EcopetrolS.A.The NationalHydrocarbonsAgency (ANH),is created, whichassumes thefunctions asadministrator ofoil resources.Carries out thefirst capitalizationprocess.482,941Colombianspurchase sharesThe State retains89.9% of theshares.Renews its brandand Corporateidentity: logochanged fromthe Tunjo to theiguana.2009/10Buys Hocol and Reficar,and acquires holdingsin Savia (Perú), Ocensaand BP in Colombia.Expands its exploratorypresence in the UnitedStates, Brazil and Peru,and enters the Asianand African markets.The BarrancabermejaHydrotreatment Plantcomes into operation.Listed on the stockexchanges of New York,Toronto and Lima.2012Creates CenitTransporte yLogística deHidrocarburosS.A.S, an affiliate100% owned byEcopetrol.2008Buys Propilcoand establishesthe EcopetrolCorporateGroup.2011Celebrates its sixtiethanniversaryCarries out the second shareissue roundEnters the Dow JonesSustainability Index.

24CorporategovernanceBarrancabermeja Refinery

About Ecopetrol25Strategic frameworkIn 2012, Ecopetrol reviewed its strategic framework in order to improve the strategyfor Upstream, petrochemicals and organizational consolidation issues such as theenvironmental, safety and human talent strategies.This process kept the guiding principles that theCorporate Group has been working on for severalyears and reaffirmed the Mega-targets of reachinga production of one million barrels per day in 2015and one million three hundred thousand in 2020.The business plan to meet these challenges showedthat there are paths in which uncertainty is lower,such as increased infill drilling and water injectionactivity, strengthening the exploratory process inColombia with basins of greater materiality, and thecontribution of overseas affiliates.This review also showed that unconventionalhydrocarbons have transformative potential,therefore becoming more significant in the strategy.The Corporate Group’s annual strategy reviewcycle has made it possible to improve the definition,direction and in particular, the focus of theorganization in achieving the objectives.Strategic framework2012-2020CLEAN BARRELSCorporate GovernanceControlNo accidents - No environmental incidents -Under labor normality - In harmony with stakeholdersIntegrityResponsibilityTransportand logisticsPROFITABLE GROWTHRespectRefiningDOWNSTREAMProductionHEAVY CRUDEGASPetrochemicalsUPSTREAMMARKETINGBiofuelsExplorationVISIONMISSIONMEGAIntegrated ManagementTeam spiritCommitment to lifeNo accidents - No environmental incidents -Under labor normality - In harmony with stakeholdersHuman talentOperational ExcellenceProjectmanagementRelations withstakeholdersInnovationand technologySupplyand services - CSCORGANIZATIONAL CONSOLIDATIONNo accidents - No environmental incidents -Under labor normality - In harmony with stakeholdersCORPORATE RESPONSIBILITYEnvironmentalmanagementPassion for excellenceSustainability

26CorporategovernanceCorporate Group MissionWe find and convert sources of energy into valuefor our customers and shareholders, ensuringthe integrity of people, the safety of processesand care for the environment, contributing tothe welfare of the areas where we operate, withcommitted personnel that seek excellence, theirintegral development and the building of longtermrelationships with our stakeholders.2020 VisionEcopetrol, a corporate group focused on oil, gas,petrochemicals and alternative fuels, will be oneof the 30 leading companies in the oil industry,recognized for its international positioning, itsinnovation and its commitment to sustainabledevelopment.Corporate Governance is part of Ecopetrol’scorporate strategy and determines its frameworkfor action.transparencyGovernanceIntegrated Management SystemControl and Prevention SystemEthicsTrust fromour stakeholdersGovernanceEcopetrol has a clearly defined governancestructure that ensures appropriate decisionmaking:ShareholdersGeneral AssemblyBoard of Directors /Board CommitteesOrganizationalstructure / HighGovernanceCommittees(management controlstructure)

About Ecopetrol27Ecopetrol Corporate Group Strategic Framework2011 -2020Integrated ManagementSystemEcopetrol has an integrated managementmodel, focused on processes andsupported by a culture that enables thefulfillment of strategic objectives andcontinuous improvement, facilitating thedeployment and alignment of the strategyat all levels of the organization.Self-regulationResponsibilityCommitment to lifeStrategyCorporate GovernancePassion for excellenceCultureIntegrityIntegrated ManagementProcessesTeam spiritRespectSustainabilityThe company has clear rules that ensure the properfunctioning of governance bodies:Corporate Governance CodeInternal Regulations of the AssemblyInternal Regulations of the Board of DirectorsInternal Regulations of the four Board Committees(Audit, Corporate Governance and Sustainability,Compensation and Nomination, and Business)Corporate Governance Guidelines applicable to theCorporate GroupSteering Committee InstructionsEvaluation Mechanisms for the Board of Directors,Board Committees and Steering CommitteeEvaluation Mechanisms for Senior ExecutivesIt has measures to ensure the protection of therights of minority shareholders, such as theDeclaration of the Nation, issued by the Ministry ofFinance and Public Credit, which in its capacity asmajority shareholder undertakes to:Include within its list of candidates for the Board ofDirectors, the representative of the hydrocarbonproducing departments operated in by Ecopetrol,as well as the representative of minorityshareholders.Ensure the right of shareholders to receivedividends; to support the initiatives of minorityshareholders to include items additional to thoseprovided in the agenda of special meetings of theAssembly.Discuss and decide on the disposal of assetswithin the Assembly, when the amount is equalto or above 15% of the market capitalization ofEcopetrol.

28EthicsThe company’s ethics process strengthens aculture based on the values of respect, integrityand responsibility.The process guidelines are enshrined in thefollowing documents: Code of Ethics, Manual forthe Prevention of Money Laundering, the Anti-Fraud Manual and the Anti-Corruption Manual.Additionally, there are confidential channelsfor reporting ethical misconduct and there areinstructions for the declaration and disclosure ofconflicts of interest.Control – prevention systemEcopetrol promotes a culture of self-regulationthat ensures continuous improvement in theperformance of employees and contributes to thegrowth of the company, through:Adoption of EnterpriseRisk Management for themanagement of risksIncorporation of internationalpractices for Internal AuditAudit Committee of theBoard of DirectorsSystematic evaluation bythird partiesecopetrol CORPORATE GROUP STRATEGIC FRAMEWORK 2011 - 2020ResponsibilityCorporate GovernanceCommitment to lifeRegular reporting to theSecurities and ExchangeCommission (SEC)All of these Corporate Governance practicescreate an environment of transparency based oncoherent behaviors that enable the opening upand flow of internal information, in order for it tobe reliable and accessible to all stakeholders.Self-regulationIntegrityCulture of self-regulation to ensurecontinuous improvement - Applicationof the PDCA cycleRespectTeam SpiritIntegrated ManagementPassion for excellenceSustainabilityExternal measurementDuring 2012, Ecopetrol received the highestrecognition in Latin America’s Investor RelationsAwards (LIRA) for its outstanding performanceand best practices in corporate governancecommunication.by companies with a market presence. The awardwas organized by the BOARD Institute for CorporateGovernance & Strategy alongside Acclaro, a Britishconsultant specializing in investor relations.The event recognized excellence in investorrelations and corporate governance communication

About Ecopetrol29Corporate governance codeThe Corporate Governance Code compiles the best practices in corporategovernance that create confidence for stakeholders and the market in general.The Code is framed within the principles of transparency, governance andcontrol within corporate management. It is aimed at members of the Boardof Directors, the President of Ecopetrol, employees, contractors and theiremployees, shareholders and investors.The Corporate governance practices established in the Code are set out inten chapters:Rights and equaltreatment of1 shareholders:Recognizes theimportance ofshareholders and investors andrespects the exercise of theirrights so that they receive thesame treatment, regardless of thenumber of shares they hold or thevalue of their investment.Shareholders GeneralAssembly: Ensures and2 promotes shareholderparticipation in thedeliberations anddecisions made at meetings of theAssembly.Board of Directors:Promotes the3 professionalizationof members of theBoard of Directors andensures the independence of atleast three of its nine members.CEO and otherexecutives: Establish4 clear rules for theelection, compensationand evaluation of thePresident and senior executives.5Corporate socialresponsibility:Recognizes therights of Ecopetrol’sstakeholders and establishes thecommitments towards them.Transparency, fluidityand integrity of6 communication andinformation: Considersthat communication isan integral and strategic processfor corporate management thatshould be guided by the principlesof transparency, clarity andtimeliness.7Control: Defines theexternal and internalcontrol mechanismsthat audit corporatemanagement.Conflicts of interest:Establishes the8 specific mechanismsthat enable theprevention,management and disclosure ofconflicts of interest.Dispute resolutionmechanisms:9 Establishesthe alternativemechanisms fordispute resolution in order topromote foreign investment,trade relations and facilitatecoexistence between shareholders,stakeholders and corporateadministration.Securities trading:Establishes an10 internal procedurefor the purchase orsale of shares in thecompany by its managers, in orderto prevent the transaction beingmade for speculative purposes ormaking improper use of privilegedinformation.

30Governance structureShareholdersGeneral Assembly:This is thehighest companymanagement bodyand is composedof the owners and/or agents of thesubscribed capitalshares, gatheredin accordance withstandards establishedby Law and theBylaws.Board of Directors:Is the seniormanagement bodyand acts in functionof the rights ofshareholders,and also ensuresthe sustainabilityand growth of thecompany.PresidentIs responsiblefor directing andmanaging thecompany. Theyexecute and ensurethe execution ofall operations andactivities comprisingthe corporate purpose,and it falls to them tolegally represent thecompany.The President is elected bythe Board of Directors, as aretheir alternates, in accordancewith the provisions of the Bylaws.The election of Presidentis made addressing criteriaof suitability, knowledge,experience and leadership,and they may be reappointedor removed at any time by theBoard of Directors.High Governance CommitteesEcopetrol has 10 High Governance committees, composed ofemployees from management level, integrated support, andbusiness processes. The President or their alternate mustnecessarily attend these committees.SteeringCommitteeProjectCommitteeInternal AuditCommitteeCorporateManagementCommitteeAffiliates andEquity InterestsCommitteeJudicial Defenseand ConciliationCommitteeBusinessCommitteeFinanceCommitteeCompensation& NominationCommitteeEthicsCommittee

About Ecopetrol31Ecopetrol organizational structureDuring 2012 there were three major changes to thestructure of the company:• The creation of the Vice Presidency of Innovationand Technology, which leads the existingColombian Petroleum Institute (ICP) Departmentand the Information Technology Department.• The creation of the Vice Presidency of HSE andOperational Sustainability, which leads theexisting HSE Department, Social ManagementDepartment and Physical Security Department.• The creation of the Technical Vice Presidency ofExploration and Production Development.Similarly, reporting levels have also changed for thefollowing areas:• Shared Services Center Department• Strategic Supply DepartmentBoardBoard Audit CommitteePresidencyInternal Audit DepartmentSecretary GeneralCorporate Vice Presidency ofStrategy and GrowthLegal Vice PresidencyVice Presidency of HumanTalentVice Presidency of CorporateFinanceDisciplinary Control OfficeStrategic Supply DepartmentVice Presidency of HSE andOperational SustainabilityPhysical SecurityDepartmentSocial ManagementDepartmentHSE DepartmentVice Presidency ofInnovation and TechnologyExecutive Vice Presidency ofExploration and ProductionExecutive Vice Presidencyof DownstreamVice Presidency ofTransport and LogisticsShared Services CenterDepartmentColombian PetroleumInstitute DepartmentNew E&P BusinessManagementNew DownstreamBusinessManagementInformation TechnologyDepartmentGeneral ManagementAmérica Inc. AffiliateVice Presidency of Refiningand PetrochemicalsGeneral ManagementBrasil AffiliateVice Presidency of Supplyand MarketingGeneral ManagementPerú AffiliateManagementsubordinationTechnical Vice Presidency ofE&P DevelopmentFunctionalsubordinationVice Presidency of ExplorationNew Area 2012Change in reporting line2012Vice Presidency of Production

32EcopetrolCorporate GroupDuring 2012 Ecopetrol continued the processof developing its investment strategy and theconsolidation of the Corporate Group. Currently ithas 25 subsidiary companies and has an ownershipstake in seven other companies. The results ofthe Corporate Group’s 2012 Management aredetailed on page 138 of Chapter 3 - EconomicDimension, in this report.Structure of the EcopetrolCorporate GroupAffiliateExplorationand production51%Transport100%Refining andpetrochemicalsAlternativeenergyFinancial andinvestmentvehicles andothersBlack Gold ReAndean Chemicals LimitedHocol Petroleum LimitedEPI LimitedEcopetrol Capital A.G.Ecopetrol Global Energy SLUEcopetrol Global Capital SLU100%

About Ecopetrol33SubsidiaryShareholding100%100%50%100%100%72.65%55.97%73%65%49%100%100%91.43%50%ZONA FRANCASantiago Oil CoColombia Pipelines Limited51%65%43.35%7.19%COL Finance S.A.100%6.87%5.32%Includes direct and indirect ownership

34Annual corporategovernancereportIn accordance with the provisions of section 21, Article 26 of theBylaws, and Section 5 of Chapter III of the Corporate Governance Code,the Board of Directors of Ecopetrol, in its own name and representingthe President of the company, presents the Shareholders GeneralAssembly the following Report on compliance with the CorporateGovernance Code, corresponding to the management of 2012Shareholders General Assembly 2012

About Ecopetrol351. Amendments to theCorporate GovernanceCodeDuring 2012 there were no amendments to Ecopetrol’sCorporate Governance Code.2. Important changes inEcopetrolStructure of share ownershipAt December 31, 2012 Ecopetrol had 458,117shareholders, representing a decrease of 9.94%compared with the 508,000 shareholdersthat it had in December 2011. Of the 458,117shareholders, 455,764 are natural persons and2,353 are legal entities. Below is the variation inEcopetrol’s shareholder database (see Figure 1and Table 1).Figure 1.Variation in Ecopetrol S.A. shareholdersNatural PersonsLegal Entities508.72.3506.4492.72.3490.4480.92.3478.6468.62.3466.3458.12.4455.7Dec. 11Mar. 12Jun. 12Sep. 12Dec. 12Source: Ecopetrol, Vice Presidency of Corporate Finance

36Table 1.Shareholding structure of Ecopetrol S.A.ComponentsDec 2011 Dec 2012Share No. of shares Share No. of sharesNation 88.49% 36,384,788,817 88.49% 36,384,788,817Pension Funds 4.09% 1,682,894,076 4.15% 1,707,325,546Natural Persons 4.24% 1,742,141,391 3.56% 1,465,210,044Funds and foreign companies 0.40% 164,479,609 0.74% 303,942,722Legal Entities 1.36% 559,312,923 1.63% 671,837,367Ecopetrol Fund ADR Program 1.42% 583,081,640 1.42% 583,593,960Total 100% 41,116,698,456 100% 41,116,698,456Source: Ecopetrol, Vice Presidency of Corporate FinanceEcopetrol Corporate GroupIn order to ensure the good governance of theCorporate Group, its strategic alignment with theparent (Ecopetrol), the fulfillment of its targets ofgrowth and organizational consolidation, and tosupport the investment tracking and monitoringprocess, during 2012 Ecopetrol continued thestrengthening process for the Subsidiaries andEquity Investments Management Model.This model is designed under a system ofcentralized planning and decentralized execution,using transactional and operational synergies,in which the subsidiary companies retain theirautonomy in decision-making, supported by theirgovernance bodies, but are subject to the guidelinesestablished by Ecopetrol in its capacity as parent.3. Important changesin the corporatereference frameworkEthics and complianceDuring 2012, Ecopetrol continued strengthening theethics and compliance process through differentmechanisms, such as:• Ongoing dissemination of the Code of Ethics,seeking to motivate employees towardchoosing ethical behaviors based on principlesand values ​as pillars of coexistence, thuscontributing to the prevention of compliancerisks (fraud, corruption, money laundering andfinancing of terrorism).• Development of the Transparency Pact,as a self-declaration completed by directemployees, under standards of confidentialityand security of the information, in orderto measure the ethical environment of thecompany.• Design and implementation of the AnticorruptionStrategy in order to: (i) build a culture

About Ecopetrol37Table 2.People trained in ethical issues in 2012DirectEmployeesContractorsDirect andContractorsRetireesLegalrepresentativesCorporateGroupTotal2,403 1,170 1,194 16 291 388 5,462Source: Ecopetrol, Ethics and Compliance Unitbased on ethical values, (ii) ensure compliancewith Anti-corruption Standards (local andinternational), (iii) develop inter-institutionalsynergies to mitigate corruption risk andstrengthen the visibility of consequences, thusreducing the perception of impunity and, (iv)develop a comprehensive program to combatcorruption in Ecopetrol for the long-term.• Working in synergy with the United Nations inthe Responsible and Safe Business Program forthe project on inter-institutional action, policyinitiatives and self-regulation measures tostrengthen supervision, control and regulationagainst money laundering and terroristfinancing in the real sector.• Signing of a contract with the firm GlobalCompliance (pioneer in complaints lines), inorder to strengthen the management processfor complaints in Ecopetrol and six subsidiariescomprising the Corporate Group.Through workshops, training and lectures,awareness was raised among 5,462 directemployees and contractors in 2012, thuscontributing to the great challenge of providing thecountry with citizens that are ethical by conviction,rather than by imposition (see Table 2).4. Compliance with thecorporate governancecode4.1. Rights and equal treatment ofshareholdersPolitical and economic rightsDuring the regular session of the ShareholdersGeneral Assembly held on March 22, 2012, theshareholders present were able to exercise theirpolitical right to participate in the deliberationsof the highest company body and approved adividend of $300 per share (equivalent to US$0.17), consisting of an ordinary dividend of $263per share (equivalent to US$ 0.15) and a specialdividend of $37 per share (equivalent to US$ 0.02),for a total distribution of 79.85% of the net profitgenerated during 2011.It is important to note that the ShareholdersGeneral Assembly approved payment of the entire$300 of dividends to minority shareholders in asingle payment from April 25, 2012, an obligationthat has been now fulfilled by Ecopetrol.

38The level of timely service toshareholder requirements in 2012was 99.98%.Identification of the main shareholdersIn compliance with corporate governance practices,the shareholding structure of the company wasreported on Ecopetrol’s website, indicating the 20shareholders with the highest number of shares:http://www.ecopetrol.com.co/contenido.aspx?catID=542&conID=39684Shareholder and investor relationsDuring 2012, a total of 327,688 petitions,complaints, claims and requests were received fromshareholders through the service channels madeavailable by Ecopetrol. This volume represents anincrease of 8.15% compared with 2011. The level oftimely service to shareholder requirements in 2012was 99.98%.Additionally, it is noteworthy that a result of 97%was achieved in the shareholder satisfaction levelfor the service, information and solutions providedto their queries and requests. Shareholders whowere not satisfied, had problems regarding thepayment of dividends by the brokerage firms and alack of knowledge of the stock market.To improve the quality of service, the followingactions were carried out: (i) meetings withbrokerage firms to report the status of dividendspaid and payable, (ii) campaigns to encourageshareholders to collect their dividends and (iii) aneducational plan regarding the stock market.Economic relations with the majorityshareholderEcopetrol’s economic relations with the nation,its majority shareholder, and with subsidiarycompanies, consolidated in 2012 throughagreements or contracts, were conducted withinthe limitations established by law, regulations onconflicts of interest and under market conditions.It is important to highlight that these relationshipsdo not seek to benefit the Nation or thesubsidiary companies, nor are they detrimentalto the interests of minority shareholders. Onthe contrary, with these contractual relations,Ecopetrol leverages the fulfillment of its corporateobjectives, contributes to the creation of a SocialState based on the Rule of Law, and strengthensits Corporate Responsibility model.4.2. Shareholders GeneralAssemblyRegular meetingOn February 21, 2012, in newspapers of extensivenational circulation and through the website,Ecopetrol published the notice convening theregular meeting of the Shareholders GeneralAssembly that was held on March 22. Additionally,and in furtherance of the corporate governancepractices adopted by the company, on SundayMarch 18, 2012 the administration remindedthe shareholders, through the same means, ofthe date of the meeting of the Assembly and themechanisms for representation within it.During the legal and statutory term of 15 businessdays before the meeting of the highest corporatebody, the relevant papers and documents weremade available to shareholders in order for them toexercise the right of inspection.In order to ensure greater transparency, thecompany used its website to publish all supportingdocuments for the meeting of the Assembly such asthe notice of convention, reminder for the meeting,

About Ecopetrol39Shareholders GeneralAssembly, Bogotá,March 22, 2012agenda, proposals from the administration, andcandidates of the Nation (in its capacity as majorityshareholder) to join the Board of Directors, as wellas their respective résumés.The regular meeting of the Assembly had thedeliberative and decision-making quorum requiredunder Law and by Article 22 of the Bylaws. Theshareholders exercised their right to vote and theissues on the agenda that were subject to a vote wereapproved. The realization of the Assembly was broadcastlive on television (canal institucional) and on Ecopetrol’swebsite. Four of the nine members of the company’sBoard of Directors attended the regular meeting.The Minutes were signed by the President of theAssembly, the Secretary and members of theMain Minutes Review and Approval Committeeappointed by the shareholders. The Minutes containa record of the issues presented, approvals andauthorizations granted by the Assembly and thecomments made by shareholders.In compliance with the securities marketstandards applicable to Ecopetrol, within 15business days following the meeting of theAssembly, a copy of the Minutes was sent to theFinancial Superintendence of Colombia. Thefull text of the Minutes was made available toshareholders on the company website.The decisions contained in the Minutes and that aresubject to registration were duly registered with theChamber of Commerce.

40With a cut-off at December 31, 2012, theBoard of Directors was composed of sixindependent members and three nonindependentmembers.Special meetingOn December 6, 2012 a special meeting ofEcopetrol’s Shareholders General Assemblywas held arising from a vacancy in the fourthrung of Ecopetrol’s Board of Directors due tothe appointment of Dr. Federico Rengifo Vélezas Minister of Mines and Energy. With the issuessubmitted for consideration by the shareholders,the Assembly appointed Dr. Jorge G. PinzónSánchez as an independent member of the Boardof Directors.4.3. Board of DirectorsIn accordance with the provisions of the Bylawsand the Corporate Governance Code, the Boardof Directors of Ecopetrol is composed of ninemembers, without alternates, elected by theShareholders General Assembly for periods of oneyear by means of the electoral quotient system.The Board of Directors elects its Chairman and ViceChairman from among its members for periodsof one year, who should preside over and lead theregular and special meetings.Composition of the Board of DirectorsWith a cut-off at December 31, 2012, the Boardof Directors was composed of six independentmembers and three non-independent members.The composition of the Board of Directors ofEcopetrol in 2012 is shown in Tables 3 and 4.Table 3.Board of Directors elected at the ordinary meeting of the ShareholdersGeneral Assembly of March 22, 2012Board Member Status Age SexMinister of Finance and Public Credit,Juan Carlos EcheverryMinister of Mines and Energy,Mauricio Cárdenas SantamaríaNational Director of Planning,Mauricio Santamaría SalamancaNon-independent 49 MNon-independent 49 MNon-independent 45 MFederico Rengifo Vélez Non-independent 58 MFabio Echeverri Correa,Chairman of the Board of DirectorsIndependent 78 MJoaquín Moreno Uribe Independent 62 MLuis Carlos Villegas Echeverri Independent 54 MAmílcar Acosta Medina Independent -Representative ofthe hydrocarbonproducingdepartmentsRoberto Steiner Sampedro Independent –Representativeof the minorityshareholders61 M52 MSource: Ecopetrol, Secretary General.

About Ecopetrol41Table 4.Board of Directors elected at a special meeting of the ShareholdersGeneral Assembly of December 6, 2012Board Member Status Age SexProfile of the members of the Board ofDirectorsThe candidates for joining the Board of Directorsmust comply with the profile defined in Article 24 ofthe Ecopetrol Bylaws:Minister of Finance and Public Credit,Mauricio Cárdenas SantamaríaNon-independent 50 MMinister of Mines and Energy,Federico Rengifo VélezNational Director of Planning,Mauricio Santamaría SalamancaNon-independent 59 MNon-independent 46 MJorge G. Pinzón Sánchez Independent 54 MFabio Echeverri Correa,Chairman of the Board of DirectorsIndependent 79 MJoaquín Moreno Uribe Independent 63 MLuis Carlos Villegas Echeverri Independent 55 MAmílcar Acosta Medina Independent -Representative ofthe hydrocarbonproducingdepartmentsRoberto Steiner Sampedro Independent –Representativeof the minorityshareholders62 M53 M“Members of the Board of Directors mustbe committed to the corporate vision ofthe company and must meet at least thefollowing requirements: (i) have knowledgeand experience in the activities pertaining tothe corporate purpose of the Company and/or have knowledge and experience in the fieldof industrial/commercial, financial, securities,administrative, legal or related sciencesactivities, (ii) have a good reputation andrecognition for their professional competenceand integrity, and (iii) not simultaneouslybelong to more than five (5) boards ofdirectors including that of Ecopetrol S.A.”Source: Ecopetrol, Secretary General.

42Election of the independentmembers of the Board of DirectorsAt least three members must be independent in accordance withthe provisions of the securities market law in Colombia (Law 964 of2005). In accordance with the provisions of paragraph two of Article44 of Law 964 of 2005, an independent member is understood as aperson who in no case shall be:12 3An employee or manager ofEcopetrol or any of its affiliates,subsidiaries or controllingcompanies, including those whohave had such status duringthe year immediately precedingthe appointment, except in thecase of the re-election of anindependent person.Shareholders who directlyor in virtue of an agreement,direct or control the majorityof the voting rights of theentity or that determine themajority composition of theadministrative, management orcontrol bodies thereof.Partners or employees ofassociations or companiesthat provide consultancy oradvisory services to the issueror to the companies belongingto the same holding company itbelongs to, when revenues fromthis represent, to them, 20% ormore of Ecopetrol’s operatingcosts or the operating incomeof the adviser, consultant orsupplier.4 5 6An employee or director ofa foundation, association orcorporation that receivessignificant donations fromEcopetrol. Significant donationsare considered those thatrepresent more than 20% of thetotal donations received by therespective institution.A manager of an entity on whoseboard a legal representative ofEcopetrol participates.People who receive anyremuneration from Ecopetrolother than the fees as a memberof the Board of Directors,the Audit Committee or anycommittee of the Board.The Board members that are elected asindependents will commit in writing to accept theposition, and to maintain their independent statusduring the course of their duties. If for some reasonthey lose such status, they should resign from theposition and the President of the company mayconvene a special meeting of the ShareholdersGeneral Assembly in order for them to be replaced.In accordance with the procedure laid down inDecree 3923 of 2006, the election of independentmembers of the Board of Directors is carriedout through a vote by the Shareholders GeneralAssembly from a list of candidates that includesthe minimum number of independent members asrequired legally and statutorily.

About Ecopetrol43Board CommitteesTo directly address its responsibilities, the Board of Directorshas four support committees made up of members of theBoard that it appoints.Table 5 sets out the work of these Committees with acut-off at December 31, 2012.Table 5.Board CommitteesCorporate Governanceand Sustainability CommitteeAudit CommitteeMain functionsIt is a management support body that theBoard undertakes for the company’s corporategovernance and sustainability. Its objective is tomake recommendations to the Board on systemsfor the adoption, monitoring and improvement ofcorporate governance and sustainability practicesIt is the Company’s highest control body, responsiblefor supervising the management and effectivenessof the internal control system. Supports the Board inoverseeing the internal control system, compliancewith the internal audit program, compliance withauditing process on the part of the statutory auditorand/or external auditors, and in monitoring that theinternal control procedures meet the requirements,objectives, targets and financial, administrative andoperational strategies determined by the Company,and in knowing, analyzing and giving its opinion inrelation to the annual report presented by the ReservesCommittee on the Company’s oil reservesMembers and requirementsAmílcar Acosta Medina (Chairman of theCommittee)Joaquín Moreno UribeJorge G. Pinzón SánchezMinister of Finance and Public CreditMinister of Mines and EnergyRoberto Steiner SampedroAt least one of its members must be independentJoaquín Moreno Uribe (Chairman of theCommittee)Roberto Steiner Sampedro (financial expert)Amílcar Acosta MedinaLuis Carlos Villegas EcheverriJorge G. Pinzón SánchezAll Committee members must be independent andhave knowledge on matters related to its functions.At least one must be an expert in financial andaccounting issues2012 Work• Review and monitoring of social managementprojects related to secondary roads.• Monitoring the management of HSE, IndustrialSafety and Environment.• Evaluation process for the President of thecompany.• Monitoring of the Corporate Governancepractices implemented in Ecopetrol and theCorporate Group.• Monitoring of the Corporate SocialResponsibility model.• Update of the management model for theEcopetrol Corporate Group.• Detailed monthly review of the Financial Statements.• Analysis and comments on the company’sinformation contained in Form 20F bound for theSecurities and Exchange Commission (SEC).• Review of Ecopetrol’s Contracting Manual andAdministrative Delegations Manual.• Discussion and comments on the process of EthicalManagement, monitoring of activities for theprevention of fraud, money laundering and terroristfinancing, and corruption.• Analysis and recommendations in relation to theCorporate Risk Map 2012-2013.• Monitoring of the results of audits performed ondifferent company processes.• Analysis and comments on the Process and Balanceof Reserves 2012.• Review and comments on the result of the InternalControl System’s maturation.• Monitoring of issues from Internal Audit and theStatutory Auditor.

44Compensation and Nomination CommitteeBusiness CommitteeMain functionsReviews and makes recommendation to theBoard on compensation schemes and selectioncriteria for senior managers, as well for other keyemployees of the organizationIt is a support body for the work carried outby the Board in relation to the definition of theCompany’s investment strategy, portfolio analysisand investment projects that require the approvalof the Board of Directors, as well as the evaluationand monitoring of the investment portfolio and theresults of such investments.Members and requirementsFabio Echeverri Correa (Chairman of theCommittee)Minister of Finance and Public CreditJoaquín Moreno UribeAmílcar Acosta MedinaAt least one of its members must be independent.Minister of Mines and Energy, Federico RengifoVélez (Chairman of the Committee)Minister of Finance and Public CreditRoberto Steiner SampedroJoaquín Moreno UribeLuis Carlos Villegas E.At least one of its members must be independent.Ge2012 Work• Review and comments on the Compensationand Promotion Policy for Ecopetrol staff.• Analysis and recommendations on the WagePolicy of the Corporate Group’s subsidiaries.• Monitoring of selection processes for SeniorExecutives in Ecopetrol Corporate Groupcompanies.• Situation analysis of the work and unionenvironment for corrective action.• Analysis and comments on the Cartagena RefineryModernization Project.• Analysis and recommendations for the structuring ofthe Business Plan and the Investment Portfolio of theCompany.• Authorization and monitoring of the release andrestructuring of investment portfolios of theCompany’s various businesses.• Review and comments on the Corporate GroupStrategy 2012-2020.• Analysis and recommendations on new business forthe Company, on a national and international level.• Monitoring of the management and outcome of theGroup’s affiliates, through ex post assessment.Source: Ecopetrol, Secretary General.

About Ecopetrol45Remuneration of members of the Boardof DirectorsIn accordance with the approval provided by theShareholders General Assembly on March 22,2012, the value of the fees paid to members of thecompany’s Board of Directors is the sum of sixminimum monthly wages (MMW) per session ofthe Board of Directors and/or internal Committeerequiring personal attendance. For sessions notrequiring personal attendance, half of the fee ispaid, i.e. Three MMW.This payment to directors is subject to withholdingtax of 10%, for those under simplified tax system,and 11% for those under the general tax system.Similarly, the percentage for the Industry andCommerce (ICA) tax is deducted. See details ofremuneration in Table 6.Table 6Remuneration of Board members (figures in pesos)Fees for attendingBoard meetingsFees for attendingBoard meetingsTotal (*)ItemCut at December 31,2011Cut at December 31,2012276,369,600 494,729,100316,003,000 542,898,600592,372,600 1,037,627,700(*) In the regular session of the Shareholders General Assembly held on March 21, 2012, an increase in fees wasapproved for Directors, from 4 to 6 MMW.Source: Ecopetrol, Secretary GeneralAverage attendance at meetingsby Board membersDuring the period April 2012 to March 2013, there were 20 meetingsof the Board of Directors. Average attendance to the meetings can beseen in Table 7.Table 7.Attendance to meetings of the Board of DirectorsMember of the Board of DirectorsSessionsattended2011 2012AverageattendanceSessionsattendedAverageattendanceMinister of Finance and Public Credit 11 69% 20 100%Minister of Mines and Energy 15 94% 19 95%National Director of Planning 15 94% 14 70%Jorge G. Pinzón Sánchez (*) NA NA 05 100%Fabio Echeverri Correa 13 72% 18 90%Joaquín Moreno Uribe 18 100% 20 100%Luis Carlos Villegas E. NA NA 12 60%Representative of the minorityshareholdersRepresentative of the hydrocarbonsproducing departments16 100% 20 100%16 100% 19 95%(*) Elected at the special meeting of the Shareholders Assembly of December 6, 2012.All absences were duly justified to the Secretary GeneralSource: Ecopetrol, Secretary General.

46Shareholding of membersof the Board of DirectorsTable 8 lists the number ofEcopetrol shares, with a cutoffat December 31, 2011, heldby members of the Board ofDirectors.In 2012, the average value of thecompany shares held by fourmembers of the Board, amountsto the sum of $ 635,592,000,taking an average value of$4,000 per share.Table 8.Ecopetrol shares heldby members of theBoardMauricio CárdenasSantamaría2,000No. of shares 20112,000No. of shares 2012Fabio Echeverri Correa81,081No. of shares 201120,311No. of shares 2012Luis Carlos VillegasEcheverriN.A.No. of shares 201186,587No. of shares 2012Joaquín Moreno Uribe50,000No. of shares 201150,000No. of shares 2012Source: Ecopetrol, Secretary GeneralAssessment of the Board of DirectorsIn compliance with best corporate governancepractices, an annual qualitative and quantitativeassessment of the Board of Directors is carriedout. Additionally, and in accordance with thehighest standards of corporate governance, in2012 an external evaluation or diagnostic on themanagement of the Board and its Committees washired. The results of these assessments are availablein the Report on the Functioning of the Board ofDirectors, which is posted on Ecopetrol’s website.4.4. CEO and otherexecutivesDespite the complexities of the environment andits impact on some of the company’s indicators,Ecopetrol proved its strength and ability to maintaincompetitive results in the industry, supported byhigher production, the development of marketingstrategies to increase sales, the execution ofa robust investment plan and organizationalconsolidation.Senior executives contributed to the achievementof business objectives through strategicmanagement of their respective areas and theundertaking of the different activities. Theirprofessional skills and career paths can be found onEcopetrol’s website.They are assessed in accordance with theindicators established in the Balanced ManagementScorecard of their area and within the termsestablished in the individual performanceagreement signed with their line manager.

About Ecopetrol47In 2012, merit-based reward was implemented for the first timein the company, which makes it possible to award a selectionof the high-performing population with a salary increase orbonus that promotes good individual performance.In the specific case of Ecopetrol’s President, his2012 Management Agreement was characterizedby the majority of its component indicatorsbeing focused on the production and addition ofreserves. The assessment result was 80.8%.In 2013, Ecopetrol reaffirmed its commitmentto advance on the path of strong and sustainedgrowth, and established new managementagreements for the President and othermembers of the management team, consistentwith the challenges demanded by the industryand its environment.The results of the evaluations of senior executivesare available on the company’s website.Senior executive selection process andcompensation policyThe selection policy for senior management inEcopetrol is the same process that applies toall human talent selection, which comprisesthe stages of searching, screening, evaluation,selection and hiring or promotion of the mostsuitable person that meets the profile for therole, i.e., training, experience, organizational andleadership skills associated with the requirementsof the role, regardless of race, sex, age, religion,nationality, geographical location, disability, andpolitical or philosophical opinion.This policy seeks to ensure that the processesare conducted in accordance with the guidelinesderived from Ecopetrol’s strategic framework andCode of Ethics.In order to provide opportunities for development,it is a process that usually takes place throughinternal selection where Ecopetrol staff participate.Only in cases of very specific profiles that are notfound within the company will there be an externalselection process involving people who have nolinks with the company.The compensation policy for senior executives inEcopetrol is the same as that defined for all theemployees of the company. All positions are valuedusing the HAY ® methodology and remuneration isreferenced to the oil sector. The application of thispolicy seeks internal fairness and competitivenessin relation to the sector, for which there is a salarystructure based on monetary income (fixedpayments) and is between -20% and +10% relativeto the oil sector median.In 2012, after Board approval, merit-based rewardwas implemented for the first time in the company,which makes it possible to award a selection ofthe high-performing population with a salaryincrease or bonus that promotes good individualperformance. This policy covered senior managers.It should be noted that the compensationpolicy does not include special payment orremuneration mechanisms in company shares forits employees and managers. The remunerationof the company’s senior executives is outlined onthe company’s website.

484.5. Corporate Social ResponsibilityEcopetrol understands Corporate Social Responsibilityas “the responsibility of an organization for theimpacts that its decisions and activities have onsociety and the environment, through transparent andethical behavior that:Complies withapplicable law andis consistent withinternational normsof behavior.Contributesto sustainabledevelopment, includingthe health and thewelfare of society.Takes intoconsideration theexpectations of itsstakeholders.Ecopetrol’s Corporate Social Responsibility Guide providesguidelines to ensure responsible management of the company’srelations with its stakeholders, based on the recognition of theirexpectations and the adoption of practices and behaviors thatseek mutual benefit, in order to leverage the achievement ofbusiness objectives, contribute to sustainable development of theenvironment, promote respect for human rights and ensure the longtermsustainability of the business.Is integratedthroughout theorganization and putinto practice in itsrelationships. “AccountabilityDuring 2012, stakeholders were able to approachEcopetrol through the Citizen ParticipationOffices. For this, the company had the followingmechanisms available to serve the public:In 2012, 19,858 citizen requests were receivedamong rights of petition, information requests, andcomplaints and claims. 99.72% of requests wereanswered within the time frames set.Email:participacion.ciudadana@ecopetrol.com.co,codigodeetica@ecopetrol.com.coquejasysoluciones@ecopetrol.com.coCall Center:Nationwide tollfree number:01-8000 918-418Service teamsin variousmunicipalitiesaround the country.3 PublicAudiences onAccountability(Bogotá, Tibú andCartagena)Personal serviceoffices in Apiay,Barrancabermeja,Bogotá,Cartagena,Castilla, Cúcuta,El Centro, Neiva,Orito, Villavicencioand Yopal.Teleiguanas (freephones availablein remote areaswhere there areno public relationsoffices), in Apiay,Castilla, Manizales,Cartago,Cali, Yumbo,Buenaventura,Cicuco, Coveñas,Pozos Colorados,Retiro, Saravena,Tibú, Vasconia,Casabe,Sebastopol,Sabana de Torres,San Martín andBanadía.

About Ecopetrol49Roundtables withStakeholders inthe municipalitiesof Aguazul,Monterrey, Tibú,Cartagena,Cicuco, Yondó,Cantagallo, Orito,La Hormiga, PuertoCaicedo, Acacias,Castilla La Nueva,Villavicencio andBolívar (Districtsof Berbeo, LaHermosura andSanta Rosa).Internet:www.ecopetrol.com.co4.6. Transparency, fluidity andintegrity of the informationprovided to the publicPublication of information on the websiteThrough this channel, and throughout the year,shareholders and investors had access to financialinformation, the credit rating, corporate governancepractices, the shareholding structure of thecompany, stock market performance, dividendspolicy, payment date for dividends, projectsunderway and the composition of the Board ofDirectors, among others.During 2012, the Ecopetrol website received anaverage of 15,401 visits per day, 34.9% morethan in 2011 when 11,415 visits were recorded; thecontent most requested by users were currentjob openings, and the page for contractors andshareholders.On March 22, 7,723 people logged on to watchthe live broadcast of the regular session of theShareholders General Assembly, 52.77% morethan last year when 5,055 people logged on.Moreover, towards the end of September 2012,Ecopetrol launched a new version of the websitewith a modern design and structure based on theconcept of sustainability. In this way, its contentsare intended to communicate how the companyhas incorporated a set of economic, social andenvironmental criteria within its corporatemanagement, which seek to generate long-termvalue and respond effectively to the challengesposed in this field today.Users find a design rich in images, withdrop-down menus that offer a wider rangeof information, with the aim of reducing thenumber of clicks that the user must make.The new page has three navigation menus: thefirst, bringing together the citizen informationservices, the second located under the page’stitle banner, which includes cross-cutting issuesregarding the company, and the third, locatedunder the keynote area, which is dedicated tostakeholders.This new site strengthens the provision ofinformation on issues such as the environment,the prevention of risks such as corruption, humanrights, and relations with stakeholders.In terms of social networks, at the end of 2012,Ecopetrol had 98,396 and 49,963 followers onFacebook and Twitter, respectively.Disclosure of relevant information to theFinancial Superintendence of Colombia andforeign regulatory authoritiesDuring 2012, 68 Relevant Information releaseswere published in the Financial Superintendenceof Colombia. In the United States 36 press releaseswere published, as well as 27 documents underForm 6-K that is required by the Securities andExchange Commission (SEC), and in Canada 36press releases were published.All press releases were disclosed to the market ina timely manner and are available in the IntegratedStock Exchange Information System (SIMEV inSpanish), on the SEC webpage www.sec.gov, onthe TSX webpage (Toronto Stock Exchange) www.tmx.com, as well as on Ecopetrol’s website www.ecopetrol.com.co

504.4. Control structureExternal controlsStatutory AuditorThe Shareholders General Assembly, during its meeting on March 22, 2012, approvedthe hiring of KPMG Ltda. as statutory auditor of Ecopetrol S.A. for the 2012 term,for a value of $ 4,492 million pesos plus VAT, and authorized the Audit Committee ofthe Board of Directors to assign it additional work during the year, related to aspectsrelevant to the company, which not being included within the object of the contractand not generating ineligibilities for the performance of their role, can be performed byKPMG Ltda.The Audit Committee’s recommendation on the appointment of the StatutoryAuditor was based on the classification of the firm’s work team, its knowledge of theindustry and the company, and its methodology tailored to the needs of the company.Also, it certified its independence in relation to conflicts interest, ineligibilities andincompatibilities.The responsibilities and duties of the Statutory Auditor are described in the company’sinternal rules and the contract minute. The results of the assessments made by theStatutory Auditor and the progress within Improvement Plans arising from theiraudit were released periodically through reports to senior management and the AuditCommittee of the Board of Directors.Inspection, supervision and control bodiesColombia’s main authorities for regulating the activities related to Ecopetrol’s corporatepurpose are the Ministry of Mines and Energy, the National Hydrocarbons Agency (ANH)and the Gas and Energy Regulatory Commission (CREG).Additionally, five different superintendencies oversee specific company activities:The Superintendence of Domestic Public Services, the Financial Superintendenceof Colombia, the Superintendence of Companies, the Superintendence of Ports andTransport, and the Superintendence of Health. It is important to note that Ecopetrol,as an intermediary on the stock market, is supervised by the Securities Market Selfregulator(AMV, for its acronym in Spanish).Moreover, because Ecopetrol has listed its shares on the stock exchanges of New Yorkand Toronto, its activity in these markets is subject to regulation by the Securities andExchange Commission (SEC), Toronto Stock Exchange (TSX), the Alberta ExchangeCommission, the Ontario Exchange Commission and the Investment IndustryRegulatory Organization of Canada (IIROC).Comptroller General of the Republic:Ecopetrol, as the subject of passive control by the Comptroller General of the Republic(CGR), implemented in 2012 the improvement plans corresponding to such period, basedon the tax audits for the 2009, 2010 and 2011 periods, consisting of 241, 323 and 342actions, respectively, with a compliance level of 100% for the three plans at the end 2012.The assessment report issued by the Comptroller General in 2012 for the 2011 periodwas “Favorable,” both for Ecopetrol’s management and results,with a score of 93.005.

Sobre Ecopetrol51Credit Rating AgenciesFitch Ratings Colombia S.A. maintained Ecopetrol’s long-term national rating at AAA(col), as well as for its debt securities in the local market. According to the definitionsused by this local agency, the obligations rated in this category are of the highest creditquality, as risk factors are virtually nonexistent.Also, international agencies Fitch Ratings and Moody’s maintained Ecopetrol’s foreigncurrency debt rating at investment grade (BBB-), with their reports highlighting thegood financial risk profile, the strength of its indicators, the diversification its sources ofincome and its leadership position in the oil and gas industry in Colombia.Similarly, Standard & Poor’s decided to allocate a positive outlook to its “BBB-” rating, anaction based on the close link between the Republic of Colombia and the company.Internal controlInternal audit departmentCompliance with the General Audit Plan was 100%. Audit work was conducted onprocesses with a risk assessment significant to the fulfillment of the company’s strategicobjectives and some projects that are of high-impact due to their level of investment andtheir significance in relation to the fulfillment of the corporate strategy.In 2012, the General Audit Plan approved by the Audit Committee of the Boardof Directors, covered 9 of the company’s 18 existing macro-processes (Refining,Transportation, Production, Projects, Supply, Operations and Financial Services,Institutional Relationships, Information Management and ComprehensiveResponsibility). The audits included projects on assurance, consultancy, evaluation ofprocess controls and financial reporting for compliance with the Sarbanes Oxley (SOX)Law, as well as activities for compliance with existing external and internal standardsapplicable to the function.As a result of implementing the General Audit Plan, the responsible areas devisedimprovement plans aimed at mitigating the observations made by the Internal AuditDepartment.Additionally, and as part of the model approved by the Audit Committee of the Boardof Directors, in 2012 the Department developed procedures in subsidiary companiesEquion, Reficar and Bicentenario, aimed at ensuring the implementation of best auditpractices and for advice on the design of general audit plans.

52Internal Control SystemDuring the past five years, Ecopetrol has been working hard on implementing its InternalControl System (ICS), in order to provide reasonable assurance in achieving its corporatetargets, fulfilling demanding regulatory compliance, trading on international stockexchanges and generally improving its management processes.Continuing the incorporation of the internal control system within the framework of theIntegrated Control and Management System, and to verify that Ecopetrol’s ICS continuesto strengthen, an evaluation was conducted on the degree of maturity reached by 2012,considering the support actions executed during 2011 and 2012.As a result of the evaluation, Deloitte & Touche has been able to conclude that Ecopetrolis progressing satisfactorily in the maturation of its internal control, and that it maintainsa “defined” level in all components of the ICS, with a maturity rate of 3.6, two points abovethe last score given in 2010.Figure 2 shows the evolution of the level of maturity of Ecopetrol’s Internal Control Systemfrom 2008 to date.Figure 2.Level of maturity of ICS components5,04,03,02,01,02008200920102011 - 2012Level of Maturity0. Non-existent1. Initialor Ad-Hoc2. Repeated butintuitive0,03. DefinedInternalenvironmentObjectiveSettingIdentificationof EventsR i s kAssessmentR i s kResponseControlActivitiesInfomation andCommunicationMonitoring4. Managed andmeasurable5. MeasurableRisk management:Ecopetrol has a Risk Management System aimed at contributing to the fulfillment ofobjectives, the preservation and creation of value for the company, and response tounexpected events.During the past two years, work has been done on the maturation of comprehensive risksystem (CRS), through the development of initiatives such as enterprise risk quantification,optimizing the use of the BWise software for risk management and the controls ofEcopetrol’s Internal Control System and strengthening the training program in riskmanagement for leaders who support the process within the company.Specifically in 2012, the alignment of the Risk Management Cycle with the ComprehensivePlanning, Management and Improvement Cycle was consolidated. In addition, KRIs (KeyRisk Indicators) were designed for monitoring business risks in order to generate timelyalerts for the control and suitable management of the risks identified.

About Ecopetrol534.8. Conflicts of interestEcopetrol has specific mechanisms that enable theprevention, management and disclosure of conflictsof interest that may arise among shareholders(majority and minority), managers and staff ingeneral, between their own interests and those ofthe company.To avoid incurring in a conflict of interest, duringthe reporting period 16 people made use of theprocedure established by the company andrevealed situations that could give rise to these and,therefore, were declared precluded from knowing orperforming a certain action.The information on conflicts of interest revealed in2012 is available on the company’s website.4.9. Dispute resolutionmechanismsEcopetrol has alternative mechanisms for disputeresolution in order to promote foreign investmentand trade relations, and facilitate coexistencebetween shareholders, stakeholders and thecompany’s management. These mechanisms,such as direct settlement, amiables compositeurs,conciliators and arbitration tribunals, become analternative, different from the regular channels ofordinary justice, to resolve contractual disputes in amore timely, specialized and in certain cases, moreeconomical manner.4.10. Securities tradingIn accordance with the Bylaws, the CorporateGovernance Code and internal instructions onsecurities trading, in 2012 Ecopetrol managersrequested authorization to the Board of Directorsto dispose of or acquire shares in the company,stating that the respective transaction was nonspeculativeand did not make use of privilegedinformation.4.11. Complaints from shareholdersand investorsDuring 2012, there were no complaints regardingcompliance with the Corporate Governance Codethrough the phone lines and mailboxes available toshareholders and the general public.The Board of Directors expresses itsappreciation to Ecopetrol and all itsemployees for their continued commitmentto the implementation of good corporategovernance practices that ensure thegovernance, transparency and control of thecompany.Information on contractual disputes settled in 2012through alternative mechanisms can be found onthe company’s website.

54Transparencyandanti-corruptionSince 2009, Ecopetrol has been strengtheningits risk management processes with a focus onpreventing fraud, corruption, money laundering andterrorist financing (compliance risks).

Sobre Ecopetrol55The objective, therefore, has not only been to seek the applicationof the Code of Ethics and compliance risk prevention manuals,but rather through a preventive and awareness raising function,for employees to act more by conviction (from within), than byimposition (what ought to be).Ethicsand anti-corruptionstrategyThe strategy is based on strengtheningstakeholders, binding them in their commitment tofight this scourge.The objectives of the strategy are:Consolidate an ethical culturebased on values.Ensure compliance with anticorruptionstandards (local andinternational).Develop inter-institutional synergiesto mitigate the risks of corruptionand strengthen the visibility ofconsequences, thereby decreasingthe perception of impunity.Develop a comprehensive programto combat corruption in Ecopetrolfor the long-term.The vision of ethics and compliance managementis based on building among workers, contractorsand other Ecopetrol stakeholders, a profileof ethical citizenship to such an extent thatthey always project transparent behavior intheir work. This has converted Ecopetrol into amodel of compliance risk management basedon prevention, which is what sets it apart incomparison with other anti-corruption strategies.The commitment of senior management andthe leaders of the organization is one of thefirst steps that will allow the consolidation of aculture of legality. It is also necessary to havethe assistance of some State agencies thatenable the company to consolidate synergiesand achieve the prosecution of offenses andthe imposition of penalties that reduce theperception of impunity for acts of corruption.

56In 2012, through workshops, training and lectures,awareness was raised among 5,462 directemployees and contractors.Thus, the anticorruption strategy includes 3 fronts:PreventionfrontTracking andmonitoringStrategicalliancesSeeks to raiseawareness and create aculture of zero tolerancetowards corruption. It isaimed specifically at directemployees and contractors’legal representatives. It isperformed through trainingfocused on identifyingsituations or behaviors thatmay be acts of corruption,communicating what theapplicable regulation is,what can be done to preventthis risk and what to do ifan event of corruption isidentified.Makes it possible toidentify where the mainvulnerabilities are in termsof fraud and corruption;a root cause analysis isperformed to identifyprocesses vulnerable to therisks identified, and based onthis, specific work plans aredeveloped.Seeks to consolidatealliances with various Stateauthorities and institutionsthat make it possible toleverage the implementationof the strategy, work towardsthe prevention of unlawfuldamage, the prosecutionof crimes related to fraudand corruption, and thestrengthening of monitoringon compliance issuesbrought to competentauthorities.Prevention mechanismsOne of the cornerstones of anticorruptionmanagement has been to foster a culture oftransparency and zero tolerance towards this risk.Thus, in 2012, through workshops, training andlectures, awareness was raised among 5,462 directemployees and contractors.The awareness raising strategy aims that staff fromthe company and various stakeholders understandwhen they may be in the presence of an act of fraudor corruption, and what they should do to preventor report them.To support this objective, several internalcommunication campaigns were implementedin 2012. Table 9 describes the most importantcampaigns.

Sobre Ecopetrol57Table 9.Awareness raising campaigns in internal channelsChannelEthical Peoplepage in IrisDetailsA space was enabled on the Intranet, Iris, wherein users can find informationon prevention processes in ethics and compliance, the publication of the Codeof Ethics, dilemmas, radio dramas, monitoring reports and a form for users tocommunicate their complaints online.Ethical dilemmasAre publications that present the main concerns related to the ethicsand compliance process based on cases and complaints that arise in theOrganization.Ethics radio dramasCharacters like Agapito and Úrsula present, through everyday stories, certaintypes of risks such as fraud, corruption and money laundering. These stories canbe found on the Ethical People page in IRIS, so that work teams can use them asmaterial for reflection.Inserts for the preventionof fraud, corruption,money laundering andterrorist financingThrough these inserts, employees found out what these risks are about, what themain types are and how to identify them. In addition to being published on the Irispage, they were physically provided along with payroll receipts.Contests and surveysEthics thermostatEthics messagesin Vice PresidentCommunicatesBulletin Messagesfrom TransformationalLeaderseNewsletters forcontractors and contractmanagersAs a measurement tool, contests and surveys were conducted to assess thepositioning of the issues addressed in the communication strategy.It is a semi-annual report which provides an analysis of complaints received eachmonth, classified by types and areas, which makes it possible to establish howthe organization is doing in ethical issues and the use of complaints channels.This is the regular newsletter from the vice presidents and directors that targetstheir work groups. Through this instrument, awareness raising and motivationalmessages are spread in order to create commitment to the ethics andcompliance actions plans in the different areas.Through bulletins used by leaders, ethical messages are disseminated tomotivate their work teams to act with responsibility, integrity and respect.Through these newsletters, this population is informed of preventionmechanisms for unethical behavior and risks such as money laundering, fraudand corruption.According to the measurement made by the NationalConsultancy Center, the Communications Strategy on the Ethicsand Compliance Process was the second most memorable forEcopetrol staff during 2012.

58Reporting mechanismsWhen an employee, contractor, shareholderor citizen is aware of or suspects a situationthat violates the Code of Ethics, they shouldmake use of the reporting channels so thatthe situation can be reviewed by the SecretaryGeneral’s Ethics and Compliance Unit.Ecopetrol has the following reporting channels:Ethics line(571) 234 3900in Bogotá01 800 912 1013nationwide toll free numberWeb formwww.ecopetrol.com.co/contáctenosAll complaints received through these channels areanalyzed according to the management procedurefor ethical issues and in accordance with theprinciples and values ​of the Code of Ethics; it isguaranteed to complainants that:Their complaintwill be analyzedobjectively by anindependent teamReprisals will not betoleratedThey will receivea response on thehandling of theircomplaintIn 2012, a contract was signedwith the firm Global Compliance,a pioneer in complaints linessince 1981. Today, it is the largestcompany of its kind with more than25 million end users worldwide.They have the largest market sharewith about 4,300 customers fromdifferent types of industries, 50%of the Fortune 100 and 30% ofthe Fortune 1,000. Annually, theyaddress and process about halfa million calls to reporting lines.With this new operator, complaintscan be received for both EcopetrolS.A. and six subsidiaries from theCorporate Group.Their identity will bekept confidential

About Ecopetrol59Risk analysisIn compliance with Article 73 of Law 1474 (Anti-Corruption Statute) that provides that publicbodies must generate an anti-corruption strategythat follows its risk map, in 2012 Ecopetrolconducted several compliance risk assessmentworkshops (fraud, corruption and moneylaundering) that enabled it identify the criticalissues in which risk is perceived.Based on the above result, the controls associatedwith these risks were identified (Internal ControlSystem - ICS), the results of tests performed byInternal Audit were analyzed, and the mattersreceived through the reporting channels weretaken into account. With these inputs, it waspossible to determine the residual risk; in caseswhere the assessment identified high and veryhigh risk, recommendations to the areas andprocesses were generated.Ecopetrol has a Risk Management Manual thatcontains the methodology under which risks aremanaged (see diagram with the methodologyused).Create theInherent RiskMapAnalyze the Gapsin ControlsCreate theResidual RiskMapRecommendations for control andmonitoringIdentify how events of fraud /corruption / MLTF can ariseAssess the inherent risks **with relevant staffSummarize and presentthe Workshop resultsIdentify the controls (financial, nonfinancialand process) that mitigatecritical risk scenariosDetermine the levelof risk mitigationDetermine the residual risk level forthe risks considered as criticalGenerate and discussrecommendationswith areas / processes**The assessment was conducted using the risk assessment matrix - RAMIn order to generate the risk map, 25 workshopsassessment were conducted involving 500employees from the company’s various departments.Based on the assessment sessions, in 2012 the riskmap was obtained, which made it possible to identifythose events considered most critical and on whichEcopetrol should focus the Anticorruption Strategy(roadmap).In conjunction with the different areas, action planswere identified to close the gaps identified in theRisk Map. At December 2012, the implementationof these recommendations was 92%.

60At the end of 2012, 119 complaints wereclosed and 40 were in the process ofverification.Suspicious transaction reportsrelating to money laundering orterrorist financingEcopetrol has Manuals for the Prevention offraud, corruption, money laundering and terroristfinancing; these set out the types and forms underwhich these events can materialize.To comply with due diligence, in 2012 thecompanies or people related to Ecopetrol werereported that had suspicious transactions orprofiles, and that should be analyzed by the relevantauthorities.During 2012, ​27 Suspicious Transaction Reports(STRs) were made to the Financial Analysis andInformation Unit of the Ministry of Finance. Figure3 presents statistics on the reports made ​byEcopetrol.Figure 3.Number of reports of suspicious transactions42007182008152009Source: Ecopetrol, Secretary General322010422011272012Measures taken in response toincidents of corruptionAt December 31, 2012, 159 complaints werereceived related to types of corruption. Of thattotal, at the end of 2012, 119 complaints wereclosed and 40 were in the process of verification.Of the 119 complaints that have passed throughthe ethics management process, it was possible tofully or partially evidence that 53 cases matchedthe hypothesis put forward . On the other hand,66 complaints did not match the hypothesisput forward; this means that after the analysisprocess, no elements were found to enable thecorroboration of the allegations (see details inTable 10).Table 10.Corruption complaints receivedCorruption complaintsreceived159 53 66 40Source: Ecopetrol, Secretary GeneralHypothesismatchedHypothesisdid not machIn the processof verificationTable 11 details the different types of closing actions for caseswhere hypotheses matched, as well as some recommendations onprocesses.

About Ecopetrol61Table 11.Closing actions and process recommendationsWorkshops on StrengtheningPrinciples and Values30For situations that do not involvethe possible perpetration of crimesor disciplinary offenses, there areworkshops aimed at strengtheningprinciples and values ​in people. In thisway, it is sought to diminish perceptionsof poor transparency.1551Handing Over to theDisciplinary Control OfficeAfter analyzing the situation reported,behaviors are identified that couldconstitute disciplinary offenses, thushanding over to the competent bodyfor investigation.Handing over to thecompetent areaAs result of the analysis, it wasidentified that there are failuresthat should be addressed by theresponsible areas. These gaps canbe opportunities to engage in acts ofcorruption. The recommendationsseek to close the existing gaps.Handing over to theAttorney General’s OfficeAfter analyzing the situation reported,behaviors that could constitute crimesare identified, thus handing over to thecompetent authority for investigation.From left to right Herbert Stegemann, Siemens; Marco A.Padilla Merigo, Ethics & Compliance Group - WeatherfordInternational; John M. Benson, Schlumberger; CarlosFernando Galán, Transparency Secretary of the Presidencyof the Republic; Javier G. Gutiérrez Pemberthy, President ofEcopetrol.First Forum on Ethicsand Transparencyin the HydrocarbonSectorEthics and compliance experts from LatinAmerica gathered at the First Forum on Ethics andTransparency in the Hydrocarbon Sector, held onOctober 4, 2012 in Bogotá. The event was heldbetween Ecopetrol, Halliburton, Independence,Lupatech, Schlumberger, Siemens, Weatherfordand Transparency Secretary of the Presidency ofthe Republic.The day included four panels: the first paneladdressed the challenges of regulation applicableto both national and international anti-corruptionlaw; the second addressed best practices incompliance risk prevention; the third panel wasdevoted to the impact of money laundering in thehydrocarbon sector and the fourth dealt with theimportance of ethics in business.1Individual conversationFor situations that do not involvethe possible perpetration of crimesor disciplinary offenses, individualconversations are held that seek tostrengthen principles and values ​inpeople.

62In 2012 the company registered no breaches,penalties or complaints related to issues ofmarketing communications, advertising or otherpromotional and sponsorship activities.Communicationand sponsorshipMarketing communications, advertising andsponsorships are a component of Ecopetrol’scorporate communication strategy, which aimsto strengthen the reputation of the companythrough better positioning of the brand, buildingtrust among its stakeholders and the delivery ofinformation in a transparent and timely manner.As part of the transparency measures adoptedby the company, all requests for sponsorshipand advertising that arrive are analyzed andpotentially approved by the Committee onSponsoring, Promotion and Advertising, basedon the Sponsorships Procedure, a document thatobjectively defines the requirements to be met foran activity sponsored by the company.According to the guidelines of the Procedure,the activities or events must meet a series ofrequirements in order to be sponsored, amongwhich stand out the relationship with the companystrategy, Corporate Responsibility initiatives andthe promotion of products and services that must,in addition, achieve extensive brand exposure andthe involvement of Ecopetrol stakeholders. Since2010, the procedure has allowed the sponsoring ofcertain cultural activities.The procedure also determines which events oractivities are prohibited for sponsorship, whichinclude political activities, religious activities orthose that generate confrontation between groupsin society.Based on the above guidelines, in 2012, 102sponsorship agreements were signed.In terms of advertising, in 2012 a campaign wasundertaken to promote the arrival of clean dieselthroughout the county, a fuel that meets strictinternational standards of containing less than 50parts per million of sulfur.In 2012 the company registered no breaches,penalties or complaints related to issues ofmarketing communications, advertising or otherpromotional and sponsorship activities.Relationswith the Congressof the RepublicEcopetrol, as a mixed economy company belongingto the decentralized sector for national services andby constitutional mandate, is expressly forbiddenfrom making any donations or contribution toparties, movements or political candidates (articles110 and 355 of the Constitution of Colombia).With regard to this, Ecopetrol did not make anydonations to political parties in 2012.Furthermore, Ecopetrol cannot conduct lobbyingactivities, defined as activities designed to influencethe public policy decisions of decision-makingbodies. Nevertheless, it is important to note thecompany can formalize comments to Colombia’sCongress and other government bodies regardingthe various legislative and regulatory initiatives thatmay affect the oil and gas sector in Colombia.

Sobre Ecopetrol63Additionally, the company has a procedure forrelations with Congress in which the internalprocedure is indicated for:Table 12.Activities with Congress 20121Attending appointmentsrequested bycongressmen andfollowing up oncommitments arisingtherein.Activity Total 2011 Total 2012Attendingappointmentsrequested bycongressmen58 93Information requestssubmitted byCongressmen31 40Responding withtimeliness andquality to informationrequests andcitation questionsfor political controldebates submitted byCongressmen.2Political controldebates attended byEcopetrol11 13Invitations fromCongress 3 1Attending citations topolitical control debates.Following up andmonitoring bills ofinterest to Ecopetrol.43Table 12 describes the main activities carriedout during 2012 with Congress.Following up andmonitoring bills ofinterest to Ecopetrolduring 2012• Green procurement• Royalties reconciliation• Transparency and access to nationalpublic information• Registration of public instruments• Border zones• ICA in the oil industry LPG• Monetary compensation resulting fromthe exploitation of hydrocarbons• Contracting of labor, goods andservices in territorial entities by oilcompanies• Stamps, highlighting the UniversidadNacional Stamp• Abolition and prohibition of hiringthrough worker cooperatives• Limitation on the acquisition of landand operating titles for renewable andnon-renewable natural resources byforeign investors• Code on Natural and EnvironmentalResources in Colombia• Rules relating to administrative andcriminal liability for environmentaldamage• Tax ReformSource: Ecopetrol, Secretary General

64CorporateResponsibilityTeca Field

About Ecopetrol65Corporate Responsibilityin EcopetrolIn Ecopetrol, corporate responsibility is seen as a strategy thatseeks to ensure that the company’s operation is in harmony andbalance with its stakeholders and the environment.It is a central component of the strategicframework, which is explicitly referred to in thecorporate mission and vision. It includes twocentral guiding principles: stakeholder relations andenvironmental management.Stakeholder relationsIn alignment with ISO 26000, Ecopetrolunderstands Corporate Social Responsibility as theresponsibility of an organization for the impactsthat its decisions and activities have on society andthe environment, through transparent and ethicalbehavior that:Contributesto sustainabledevelopment,including thehealth and welfareof society.Takes intoconsideration theexpectations ofits stakeholders.Complies withapplicable lawand is consistentwith internationalstandards ofbehavior.Ecopetrol’s Corporate Social Responsibility (CSR)Guide, provides guidelines to ensure responsiblemanagement of the company’s relations with itsstakeholders, based on the recognition of theirexpectations and the adoption of practices andbehaviors that seek mutual benefit. This is in orderto leverage the achievement of business objectives,contribute to the sustainable development of theenvironment, promote respect for human rights andensure the long-term sustainability of the business.Is integratedacross the entireorganizationand is put intopractice in itsrelations.In 2012, a detailed review exercise for the CSR Guidebegan, in order to identify improvement opportunitiesto strengthen the integration of CSR in Ecopetrol’smanagement and ensure the incorporation of theprinciples and elements set out in ISO 26000.

66The update specified the key elements that shouldbe considered in the management of relationshipswith stakeholders, in order to ensure sustainable andsocially responsible management. These elements aredescribed below:Principles for relationswith stakeholders: inmanaging relationships with itsstakeholders, Ecopetrol adoptsthe principles established byISO 26000: i) accountability,ii) transparency, iii) ethicalbehavior, iv) respect for theinterests of stakeholders,v) respect for the principleof legality and internationalnorms of behavior, and vi)respect for human rights.These principles are focusedtoward action, which impliesthe cross-cutting applicationthereof in relations withstakeholders.Action plans to ensureadequate relations: all areasof the company implementingthe relations strategy with eachstakeholder and those thatmanage cross-cutting issues,should have an action plandetailing the specific actions tobe performed in a period of time(a year) to ensure adequaterelations.Identification ofstakeholders: Ecopetrol’srelations model identifies sevenstakeholders. Each of thesegroups can affect or be affectedby Ecopetrol’s decisions andactivities. All areas of Ecopetrolmust recognize the existenceof the seven stakeholdersidentified by the company.They must also ensure theresponsible managementof their relations with thesegroups.Consultation on stakeholderexpectations: Ecopetrol mustregularly review the expectationsof its stakeholders and takethem into account for definingthe relations model with eachof them. In order to consult theexpectations of its stakeholders,Ecopetrol uses, among others,the following instruments:direct consultations, dialogueopportunities and the analysis ofrequests, complaints and claims.The results of these consultationsshould allow Ecopetrol torecognize the interests andexpectations of its stakeholdersand incorporate them into itsrelations model.Review and verificationof the relations strategy:the review and verificationof the strategy aims tomonitor progress in meetingthe commitments made,communicating the mainachievements and impacts,understanding the viewsof stakeholders on keyissues, and obtaining inputsthat enable continuousimprovement of relationsstrategy. It is carried out,among others, through thefollowing instruments: CSRCommitments ComplianceLevel Indicator, StakeholderMonitoring Reports, PublicAudiences on Accountability,Sustainable ManagementReport, self-assessments andreview of senior management.

About Ecopetrol67Cross-cutting issues: for itsimplementation, the CSR Guide takes intoaccount the existence of cross-cutting issuesthat are highly valued and associated bystakeholders as an expression of corporatesocial responsibility. Such is the case with:• Governance of the organization• Human Rights• Labor Practices• Environment• Fair operating practices• Consumer Affairs• Active participation and communitydevelopmentThese issues are key in terms of reputationand trust; they must be expressed in thedaily management of the company andincorporated into the CSR strategy in acrosscutting manner. This includes ensuringthat following elements exist for each issue:• Guidelines, guides or practicesthat ensure their incorporation intostakeholder relations.Definition of thestakeholder relationsmodel: the consultationof expectations serves asa key input to define therelations model with eachstakeholder, as it allowsEcopetrol to identify themost important issuesaround which to build orstrengthen a mutuallybeneficial relationship withthese groups. Ecopetrol’srelations model consists offour key elements:• Commitment: assertion orstatement that sets out theprinciples or value promisesthat the company offers toa particular stakeholder.It is created by taking intoaccount the expectations ofstakeholders, as well as thecompany’s strategic optionsand interests..• Relations aim: a clearand precise statement ofachievements and aimsexpected to be achieved inorder to fulfill a commitmentwith a particular stakeholder.• Initiative: the set of actionsto be undertaken by thedifferent areas of Ecopetrol toensure compliance with theobjectives and the commitmentto each stakeholder.• Specific skills and knowledge withinEcopetrol’s departments to ensureproper management.• Communication spaces andmechanisms through which thecompany can report its managementin such matters to its stakeholders, in atimely and accurate manner.• Indicators: are measurementsof changes or results thatmake it possible to verify andmonitor the achievement ofthe relations objectives.

68Stakeholdersand commitments to themIn accordance with the provisions of the Corporate SocialResponsibility Guide, Ecopetrol identifies seven stakeholders. Therelations commitments and objectives with each are presented inTable 13.Table 13.Commitments and objectives by stakeholderCOMMITMENTEnsure thesustainability of thebusiness throughethical, transparentand responsiblemanagementPartnersCOMMITMENTEnsure sustainablebusiness withinframework for actionthat is transparent,reliable and of sharedleadershipShareholdersand investorsRELATIONS OBJECTIVESMaximize shareholdervalue in a sustainedmanner.Ensure corporategovernance and promoteethical and transparentbehaviors.Strengthen relationswith shareholders andinvestors.Employees,retireesand theirfamiliesCOMMITMENTBuild a great placeto work within aframework based onrelationships of trust,transparency andproductivityEnsure fair compensationwithin a frameworkof corporatecompetitiveness.RELATIONS OBJECTIVESProvide and maintain faircommercial relations andwith clear rules for mutualbenefit.Ensure internationalHSE standards in jointventures.Jointly contribute to theviability of the businessensuring the developmentof the surroundings.COMMITMENTTransparency and clearrules within a mutuallybeneficial relationshipHave leadership thatleverages the developmentof employees andthe company’s workenvironment.Ensure international HSEstandards for employees.COMMITMENTHelp build a SocialState based on therule of Law by fulfillingour obligations andsupporting institutionalstrengtheningContractors andtheir employeesRELATIONS OBJECTIVESEnsure transparency in thesupply chain.Ensure internationalstandards of HSE in thejoint operation.Ensure compliance withthe parties’ contractualterms.Promote responsiblepractices in ourcontractors.RELATIONS OBJECTIVESAct within a framework ofrespect and promotion oflabor and union rights.Contribute to the quality oflife of employees, retireesand their families.StateRELATIONS OBJECTIVESEnsure and promotecompliance with theobligations to Stateinstitutions.Support the strengtheningof local authorities inorder for them to properlymanage their obligations.

Sobre Ecopetrol69RELATIONS OBJECTIVES COMMITMENTSociety andCommunityCOMMITMENTParticipate inthe sustainabledevelopment of thecountry, within aframework of sharedresponsibility andrespect for humanrightsStrengthen relationshipsof mutual responsibilitybased on dialogue andparticipation.Carry out all activities withsocial and environmentalresponsibility.Promote collectiveprocesses of regionaldevelopment.Act within a framework ofrespect and promotion ofHuman Rights.Ensure customersatisfaction throughservice excellenceMega-target forstakeholder relationsTo ensure that Ecopetrol is recognized for itscommitment to sustainable developmentand building long-term relationships with itsstakeholders, a set of Mega-targets are definedaround four main areas that act as catalyzers forthe achievement of the corporate targets. TheseMega-targets and their results in 2012 are presentedin Table 14.Table 14.Results of the mega-target for stakeholder relationsArea Instrument Target Result2011Result2012Sustainability Dow Jones Remain Top 9% Top 5%SustainabilityIndex (DJSI)in the Top10%CorporateMERCOFirst three First place First placereputation andtrustplacesTransparentmanagement andGRI Standard –Global CompactCategoryA +A Checked A+Checkedrespect for humanrightsCommunicationon ProgressSupport behaviorsfor stakeholdersCommitmentscompliance level>90% 81.4% 87.5%CustomersMaximize the value ofproducts and services forcustomersSource: Ecopetrol, Secretary General

702012 consultationof stakeholdersexpectations andproposed adjustment tothe relations modelIn accordance with the provisions ofthe Corporate Social ResponsibilityGuide, Ecopetrol should periodicallyreview the relations model to ensurethat it incorporates the expectationsof different stakeholders, and identifythe most important issues to buildand strengthen a mutually beneficialrelationship.Since its initial definition in 2008,there have been two expectationsconsultations: the first was carriedout in 2009 and the results wereused as a starting point for settingthe relationship model for the 2010to 2012 period. The second wascarried out in the second half of 2012.The consultation’s methodologywas divided into three stages, asdescribed below:Based on the results of the 2012expectations consultation, theproposed adjustment to theCorporate Social ResponsibilityModel was prepared.The development of this proposedadjustment enjoyed the participationof the different areas of the companythat manage relations with eachstakeholder. The relationshipcommitments and objectiveswere validated by such teams. Themonitoring of this new model willstart from January 2013.The new proposed relationscommitments and objectives arepresented in Table 15.Stage 1Consultation on stakeholderexpectations: aimed to identify issuesof common interest to Ecopetrol andits stakeholders that are key in termsof relations. It involved the use of threetechniques for collecting and managinginformation, through which 18,000consultations were made available.Stage 2Establishment of the adjustmentproposal: aimed to develop and proposeadjustments to the relations modelin terms of commitments, objectivesand indicators, and the identificationof relevant initiatives for theirmaterialization.To this end, seven workshops wereconducted with those directly responsiblefor relations with each stakeholder groupas well as representatives of other areasinvolved in the process, in which theresults of the consultation were analyzedin-depth, the current relations model wasrevised, was compared with the resultsobtained, and the adjustment proposalsfor the relations model with eachstakeholder were created.Stage 3Validation and approval of theadjustment proposal with eacharea: aimed to achieve ratification fromthe areas responsible for managingrelations with each stakeholder, for theproposed adjustments to the relationscommitments, objectives, indicators andinitiatives.Specifically, internal meetings were heldin each of the areas to review and analyzethe proposal and, in appropriate cases,the necessary adjustments were made.This last step made it possible to confirmthe commitment of each area with therelationship model as a whole, and setthe stage for its subsequent deploymentthroughout the management structure.Shareholdersand investorsContractors andtheir employeesTable 15.CSR Model adjusted for 2013RELATIONS OBJECTIVES COMMITMENTRELATIONS OBJECTIVESCOMMITMENTPromote secure,profitable andtransparentinvestment throughproper managementof the business and itsenvironmentCreate value forshareholders.Promote managementwith principles of ethicsand transparency.Strengthen relationswith shareholders andinvestors.Transparency, clearrules and a mutuallybeneficial relationshipEnsure ethical andtransparent practices inthe supply chain.Ensure clear rules incontracting processes.Create shared value byidentifying opportunities inthe supply chain.Ensure compliancewith high standards ofperformance.Develop sustainablesuppliers in termsof productivity,competitiveness,culture and businessmanagement.

About Ecopetrol71COMMITMENTEnsure sustainablejoint ventures withina framework oftransparent, reliable,efficient and mutuallybeneficial relations.COMMITMENTParticipate inthe sustainabledevelopment of thecountry, within aframework of sharedresponsibility andrespect for humanrightsCOMMITMENTEmployees,retirees andtheir familiesRELATIONS OBJECTIVESBe the best placeto work, generatingshared value withina framework of trust,transparency andproductivityContribute to the quality oflife of employees and theirbeneficiaries.Develop thecomprehensive growthof employees in theorganization.Promote a healthy,clean and safe workingenvironment.Act within a frameworkof respect for the right ofassociation and freedomof association.Ensure fulfillment ofobligations and properattention to employees,retirees and theirbeneficiaries.Promote a culturebased on ethics andtransparency.PartnersStateRELATIONS OBJECTIVESRELATIONS OBJECTIVES COMMITMENTCreate and maintain clearrules.Ensure fulfillment of thejoint venture’s valuepromise.Jointly contribute tobusiness sustainability,the development ofthe environment andsuitable relations with itsstakeholders.Contribute to the creationof Social State based onthe rule of Law by fulfillingour obligations andsupporting institutionalstrengtheningEnsure fulfillment ofobligations to the State.Generate synergies withnational, regional and localentities that contribute tothe fulfillment of businessobjectives and the sustainabledevelopment of the country.Support the strengtheningof State entities in order forthem to properly manage theirobligations.Society andCommunityCustomersRELATIONS OBJECTIVESRELATIONS OBJECTIVES COMMITMENTUndertake all activities withsocial and environmentalresponsibility.Promote collectiveprocesses of regionaldevelopment.Strengthen relationshipsof shared responsibilitybased on dialogue andparticipation.Act within in a framework ofrespect and promotion ofhuman rights.Be the best option forsupplying customerswith our products andservices, under criteriaof timeliness, qualityand quantityEnsure supply tocustomers under criteriaof timeliness, quality andquantity.Achieve levels ofexcellence in serving ourcustomers.

72Ecopetrol on the DowJones SustainabilityIndex (DJSI)Through its Corporate Responsibility strategy,Ecopetrol seeks for its operation to be inbalance and harmony with its stakeholdersand the environment. Therefore, it incorporatessustainable practices in economic, social andenvironmental matters, among which standsout the promotion and development of humancapital, work with communities, relations withstakeholders, customer management andinitiatives to cleaner produce fuels.In recognition of its work, Ecopetrol was ratifiedwithin the Dow Jones Sustainability World Index.The DJSI is one of the leading global indicatorsthat monitors the financial performance ofleading companies in terms of corporatesustainability in the economic, social andenvironmental dimensions. Due to its impact, it isan obligatory reference for analysts, institutionalinvestors, sector-specialized institutions, andportfolio investors who believe in the potentialand results of sustainable companies whenmaking investment decisions.With this achievement, for the second yearrunning Ecopetrol remains in the groupcomprising the 10% of companies with the bestsustainability performance in a universe of 2,500publicly traded companies forming part of theDow Jones global indicator.The achievement was the result of workdone by Ecopetrol to ensure sustainablemanagement and reach the target ofproducing one million clean barrels in 2015and 1.3 million in 2020. Clean barrels representan integral concept that involves an operationwith no accidents, no environmental incidents,under labor normality, in harmony withstakeholders and with a ROCE of 17%.CSR resultsin 2012Society and communityCommitment | Participate in the sustainable development of thecountry, within a framework of shared responsibility and respect forhuman rightsObjectiveStrengthen relations ofshared responsibility basedon dialogue and participationTimely response to citizens%96.499.9192ObjectiveCarry out all activities with socialand environmental responsibilityReduction in greenhouse gasemissionsTon-CO 2/ Year6,001280,257279,2852011 2012 Targets 2012 2011 2012 Targets 2012ObjectivePromote collective processes of regional developmentManagement index of resourcesfor social investmentNatural number4.307.16Generation of productioncapabilities%132114.31002010 2011 Targets 2011 2011 2012 Targets 2012ObjectiveAct within a framework of respect and promotion of Human RightsCompliance with Ecopetrol’stactical plan on human rights%9297902011 2012 Targets 2012

About Ecopetrol73Contractors and their employeesCommitment | Transparency and clear rules within a mutuallybeneficial relationshipObjectiveEnsure transparency in the supply chainSupplier satisfaction%ObjectiveEnsure international standards of HSE inthe contracted operationFrequency of accidents due tocontractor responsibilityAccidents / Million Man Hours (MH)8995890.860.670.8620112012Targets 201220112012Targets 2012ObjectiveEnsure compliance with the parties’ contractualtermsPerformance of Ecopetrolcontractors%958080ObjectivePromote responsible practices from ourcontractorsLocal contracting of goods and services%47.27252020112012Targets 201220112012Targets 2012Shareholders and investorsCommitment | Ensure the sustainability of thebusiness through ethical, transparent and responsiblemanagementObjectiveEnsure corporate governance andpromote ethical and transparentbehaviorsDow Jones SustainabilityIndex%ObjectiveMaximize shareholder value in asustained mannerNet earnings per sharePesos364.16ObjectiveStrengthen relations with shareholdersand investorsShareholder satisfactionlevel%Entry totop 10% DJSI135.9203.2510 101099.9199.98982011 2012 Targets 20122011 2012 Targets 2012 2011 2012 Targets 2012

74StateCommitment | Help build a Social State based on the rule of Law by fulfilling ourobligations and supporting institutional strengtheningObjectiveEnsure and promotecompliance with the obligationsto State institutionsCompliance with improvementplans - Control entities(Comptroller General of theRepublic)%959995ObjectiveSupport the strengthening oflocal authorities in order forthem to properly manage theirobligations through publicparticipationStrengthening of public managementNatural number772222011 2012 Targets 2012 2010 2011 Targets 2012Employees, retirees and their familiesCommitment | Build a great place to work within a framework basedon relationships of trust, transparency and productivityObjectiveEnsure fair compensation within a frameworkof corporate competitivenessFairness in employee compensation%ObjectiveHave leadership that leverages thedevelopment of employees and thecompany’s work environmentWork environment index(Great Place To Work)PointsObjectiveAct within a framework of respect andpromotion of labor and union rightsFulfillment of labor relationsprojects%99.2399.409810072.957.17150502011 2012 Targets 2012 2011 2012 Targets 20122011 2012 Targets 2012

About Ecopetrol75CustomersCommitment | Ensure customersatisfaction through service excellencePartnersCommitment | Ensure sustainable businesswithin an action framework that is transparent,reliable and of shared leadershipObjectiveMaximize the value of products and services forcustomersCustomer satisfaction index%ObjectiveEnsure sustainable businessPartner satisfaction%92 92898962892011 2012 Targets 20122011 2012 Targets 2012ObjectiveEnsure international standards of HSEfor employeesObjectiveContribute to the quality of life of employees, retirees andtheir familiesAccident frequency due todirect responsibilityAccidents / Million Man-HoursFrequency index of absencedue to occupational diseaseEvents / Million Man-HoursEffectiveness index forcomprehensive staffwell-being program%20112012Targets 20121001001101.9720111.670.86 1.60.170.52012 Targets 20122011 2012Targets 2012Absenteeism index dueto common diseaseEvents / Million Man-HoursContribution tothe comprehensivehealth well-being ofemployees, retireesand their families%20112012Targets 201220112012Targets 2012144162.290.1100103182Source: Ecopetrol, Secretary General.

76Dialogue withstakeholdersThird Ecopetrol Forum onCorporate ResponsibilityEcopetrol’s Citizen Participation Office (CPO) guarantees citizens’right to information and beyond that, it becomes a space fordialogue with all the company’s stakeholders.Timely response to citizensThe receipt and response to requests, complaints and claims,has as its main objective to achieve smooth and effectivecommunication between Ecopetrol and its stakeholders.To this end, the Citizen Participation Office has provided thefollowing channels:How to operate responsibly in difficultenvironments, is the name of the ThirdCorporate Responsibility Forum organized byEcopetrol and attended by 450 leaders fromthe company’s different operating areas andfrom all regions of the country.This forum, which was held on September 4,2012 in Bogotá, aimed to analyze the differentmethodologies used to establish strong andsuccessful relationships with communities thatensure the viability of the projects and theiruninterrupted operation.The Forum was attended by renownedpanelists such as Bernardo Kliksberg, aninternational guest known as the “father ofsocial management;” Luis Fernando Rico,president of Isagen, and Horacio Serpa Uribe,former governor of Santander, among others.Personal serviceoffices in Acacías,Barrancabermeja,Bogotá, Cartagena,Cúcuta, El Centro, Neiva,Orito, Villavicencio andYopal.Call Center: toll freenumber 01-8000-918-418Email:participacion.ciudadana@ecopetrol.com.coquejasysoluciones@ecopetrol.com.coInternet:www.ecopetrol.com.coTeleiguanasMobile servicesteams in severalof the country’smunicipalitiesTable 16 shows the results of the indicator for timely response tocitizens during the last 4 years.

About Ecopetrol77Table 16Timely response to citizensType of request 2010 2011 2012Total Fulfillment Total Fulfillment Total Fulfillmentmanaged managed managedRights of petition 8,232 99% 5,104 99.75% 12,329 99.89%Information requests 6,841 97% 6,171 99.68%Complaints and claims 5,947 84% 6,632 97.95% 7,529 99.48%Cumulative general indicator 21,020 96.42% 17,907 99.28% 19,858 99.72%Source: Ecopetrol, Secretary GeneralIncorporated into the Petitions indicatorPublic Audienceson AccountabilityVoluntarily and in addition to the ShareholdersGeneral Assembly, the Citizen Participation Officeconducts Ecopetrol’s annual Public Audiences onAccountability. This exercise is carried out annuallyin the country’s regions where the companyoperates.During 2012 there were three regional audiences for atotal of 19 audiences in the last 8 years.As a strategy to ensure attendance and ensure thegreatest coverage of stakeholders in the region wherethe audiences are conducted, various communicationmechanisms were used to make a direct and openinvitation, including:• CPO teams in the municipalities of direct influence• Radio ads on local stations• Press releases• Live invitation on local television channels• Promotional posters in strategic areas of themunicipalities• Personal invitations sent by registered mail torepresentatives of all stakeholders• Convocation through the chairpersons ofCommunity Action Boards and Local Authorities• Parish notices in municipal churchesAdditionally, stakeholders are offered bus routes fromstrategic points. Also, for those unable to participate inperson, there is an online transmission via streaming.In 2012, the two regional Public Audiences wereattended by 1,397 participants, as follows:• Regional audience held in Tibú, on June 22, 2012:480 attendees.• Regional audience held in Cartagena, on August24, 2012: 917 attendees.

78Regional roundtables:Continuing with this initiative, in 2012 roundtableswere conducted around issues that are relevantto the stakeholders in each region, according tothe information gathered by the environmentalmonitoring exercises carried out by the CitizenParticipation Offices.For the carrying out of each roundtable,the Citizen Participation Office in eachregion openly convenes the community thatcomprises the various stakeholders andEcopetrol process leaders, in order to buildsolutions around these issues, generatingcommitments from both parties.Table 17.Roundtables 2012Castilla La Nuevaand VillavicencioMay and June 20122roundtablesset up140participants75commitmentsgenerated96%Timeliness indicator for thefulfillment of commitmentsBerbeoSeptember 20124roundtablesset up109participants6commitmentsgenerated100%Timeliness indicator for thefulfillment of commitmentsLa HermosuraSeptember 20124roundtablesset up80participants4commitmentsgenerated75%Timeliness indicator for thefulfillment of commitmentsSanta RosaSeptember 20124roundtablesset up113participants8commitmentsgenerated75%Timeliness indicator for thefulfillment of commitmentsTibúMarch 20124roundtablesset up110participants15commitmentsgenerated93%Timeliness indicator for thefulfillment of commitmentsCartagenaMay 20124roundtablesset up109participants29commitmentsgenerated66%Timeliness indicator for thefulfillment of commitments

About Ecopetrol79These commitments and the progress in their implementation, arepresented in the Public Audiences on Accountability and the followupRoundtables. The CPO is responsible for following up on thecommitments in order to ensure continuous improvement of therelationship between Ecopetrol and its stakeholders.Table 17 presents the roundtables conducted in 2012.CicucoJune 20124roundtablesset up119participants21commitmentsgenerated86%Timeliness indicator for thefulfillment of commitmentsYondóJune 20124roundtablesset up145participants35commitmentsgenerated83%Timeliness indicator for thefulfillment of commitmentsCantagalloJune 20124roundtablesset up132participants31commitmentsgenerated77%Timeliness indicator for thefulfillment of commitmentsOrito, La Hormigaand Puerto CaicedoApril and May 201212roundtablesset up439participants81commitmentsgenerated91%Timeliness indicator for thefulfillment of commitmentsAguazulMay 20124roundtablesset up135participants28commitmentsgenerated46%Timeliness indicator for thefulfillment of commitmentsMonterreyMay 20124roundtablesset up93participants20commitmentsgenerated45%Timeliness indicator for thefulfillment of commitmentsSource: Ecopetrol, Secretary General

80Mobile teamsfor citizen relationsThe mobile teams for citizen relations areopportunities for dialogue that are open to thevarious stakeholders, which are deployed throughvisits by professionals from the Citizen ParticipationOffice to the various municipalities, villages or fieldswhere Ecopetrol operates.In these spaces, in addition to providing information toattendees about the company’s guidelines on CSR, andthe citizen participation model and its various channels,the complaints, requests and claims of stakeholdersare received, ensuring that they enter the responseprocess and are resolved in accordance with the criteriaof timeliness and quality required by these.Stakeholder monitoringThe Citizen Participation Office is responsiblefor monitoring the company’s relations withits stakeholders, for which it uses sources ofinformation such as the petitions, complaints andclaims filed by all Ecopetrol stakeholders, as wellas the information received by mobile teams, inregional roundtables and in the Public Audienceson Accountability.The map details the teams deployed in the last twoyears.20111820128Caribbean201145201214Casanare201180Meta2012802011 2012 2011 20129 18 26 16BogotáMagdalenamedio201120East201220201132201212South

About Ecopetrol81Community in TibúUnder these guidelines, in 2012, 12 nationalmonitoring reports were produced, as well as 54bimonthly monitoring reports pertaining to thefollowing regions: Caribbean, Casanare, Central,Huila-Tolima, Magdalena Medio, Meta, West, Eastand Orito (Putumayo).The information contained within the reports madeit possible to identify improvement opportunitiesfor Ecopetrol’s processes, products or services,which are reflected in the improvement plansdefined and implemented by the areas responsiblefor relations, providing solutions to the causes ofthe problems identified.For 2012, improvement plans were generated forthe following issues:• Educational benefit• Inconsistency in the settlement of payroll• Dissatisfaction with health services• Lack of timeliness in the payment of dividends• Additional damage caused by the operation• Contracting of local goods and services• Easement rights• Dissatisfaction from customers regardingproductsResult for KRIIn order to control issues of dissatisfaction thatcan negatively impact relations with stakeholders,from March 2012 the calculation of the KeyRisk Indicator (KRI) began, in order to alertthe organization on the behavior of issues thatrepresent risk, seeking that such dissatisfactionstend to zero, by solving the root causes thereof.Using the traffic lights methodology, during theyear regular reports were prepared for each issueand were delivered to the respective areas in orderto generate the corrective and preventive actionsrequired.• Complaints from subcontractors and employeesregarding alleged breach of obligations bycontractors

82Integratedsustainability reportScope of the ReportSince 2006 Ecopetrol has been publishingannual reports addressing its economic, socialand environmental management. In 2009 it tookthe decision to migrate its reports to the GRI G3methodology.Following the full years 2009 and 2010, the companydecided to integrate its Annual Management Reportand Sustainability Report into a single document,thus progressing towards the more modern trend ofintegrated reports on sustainable management.In the event that for better understanding, theinformation that is being provided requires data frompartner or subsidiary companies, within or outsideColombia, this situation will be made explicit.Additionally, this report corresponds with thecommunication requirements established by theUnited Nations Global Compact, since it includesthe matrix of indicators required by GRI and itsalignment with the Compact’s ten principles. Thus,this report is equivalent to the Communication onProgress (COP) required by this initiative.This fourth report under the GRI 3.1 standard, andthe second of the integrated type, reports on theeconomic, social and environmental management ofthe company for the fiscal period from January 1 toDecember 31, 2012, and includes information from2009, 2010 and 2011, which displays the context,traceability and results of the initiatives described.The 2011 Sustainability Report, which wascomparative to 2010, was presented at theShareholders General Assembly on March 22, 2012and then, on June 8 it was presented publicly andwidely distributed among its stakeholders in an eventheld in Bogotá.Boundary of the ReportThis second integrated sustainable managementreport and the fourth developed under GRI 3.1methodology, covers the operation of Ecopetrol S.A.Materiality processIn addition to the concerns identified by the CitizenParticipation Office recounted in this document, dueto its extensive territorial presence, its shareholdingcomplexity and the multiplicity of stakeholders thatare impacted by Ecopetrol S.A. through its work, theinternal team trained in GRI methodology, consistingof 48 professionals, in June 2012 reviewed all theindicators established by the G3.1 methodology andthe Oil&Gas Sector Supplement, antecedents whichit crossed with information from the various sourcesthrough which it maintains an active dialogue with itsstakeholders.This process made it possible to establish thatboth the general and sectoral indicators are ofinterest to some of its many stakeholders, andthus it was decided to cover them as widely aspossible, indicating web links where more detailedinformation can be obtained.

About Ecopetrol83In respect of this, it is necessary to add the resultsof the following studies and evaluations carried outon the company:• Study conducted by the company GoodwillComunicaciones S.A., representative inColombia of The Reputation Institute, throughthe registered RepTrak methodology.• Second measurement by the Dow JonesSustainability Index.• Work environment measurement conductedby Great Place to Work.• Feedback study on the Integrated SustainableManagement Report 2011, conducted byCentro Vincular, from Pontificia UniversidadCatólica, Chile.• Recommendations from the independentverification of the preparation process ofIntegrated Sustainable Management Report2011, under the principles of standardAA1000AS2008, conducted ​by the firm BSDConsulting.methodology was coordinated by the CorporateSocial Responsibility Unit and the CorporateCommunications Unit, which fall under the SecretaryGeneral of Ecopetrol.Any concerns, questions or requests for additionalinformation regarding this report should be sentto the email address reportedesostenibilidad@ecopetrol.com.coSimilarly, the Report is available to the general publicon the website www.ecopetrol.com.coExternal assuranceof the ReportThis integrated sustainable management report has beensubmitted to a double process of external assurance, inaddition to those to which it is subject to by law.In matters concerning the economic dimension andthe Financial Statements, the audit was conductedby KPMG whose certificate is found in the annexes tothis document.This report describes the detail of the definedmateriality at the beginning of each chapter ordimension.Reportpreparation processThe process of preparing this second integratedreport on sustainable management andfourth Sustainability Report under GRI G3.1In terms of international sustainability standards,BSD Consulting was the company responsible forindependent verification of the preparation processfor the 2012 Ecopetrol Sustainability Report. Thisverification included a thorough review of the levelof application of the Global Reporting Initiative (GRI)guidelines and methodology, as well as a review ofthe integration of AA1000AS 2008 principles into themanagement processes in Ecopetrol.Finally, Ecopetrol made the appropriate arrangementswith the GRI for the granting of authorization for use ofthe GRI Checked Seal, at level A+.

84Ourvaluechain02Barrancabermeja RefineryEcopetrol participates in all stages of the hydrocarbonchain, from the exploration and production of oiland gas, to their processing into higher value-addedproducts, and their subsequent marketing in nationaland international markets.Each of the steps undertaken in this area involve risksand opportunities for both the company and the regionswhere the activities are carried out, as well as for thecountry, which thanks to the presence of Ecopetrolis able to undertake new social initiatives aimed atimproving the standard of living for Colombians.ExplorationProductionTransport

Our value chain85Refining andpetrochemicalsSupply andmarketingInnovationand technology

86New projects: Cupiagua Gas Plant (Casanare): capacity up to 210 Mcfd.Sardinata Gas Plant (Norte de Santander): capacity 1.5 Mcfd.Exploration11 hydrocarbon discoveries:9 in Colombia and 2 in the Gulf ofMexico (USA).Best tenders, as a Group, in 16 blockswithin Ronda Colombia 2012 and 6blocks within lease 216/222 (USA).Strategy for offshore exploration in theCaribbean with world-class partners.Progress in the program forunconventional hydrocarbons.ProductionProduction by Ecopetrol andaffiliates increased 4.1% to754,000 barrels of oil equivalentdaily average.9.1%increasein theproduction of heavy crude to303.6 Kbod, compared with 2011.Equión’s growth in productionwas 25.2%.ReservesReserves increased1% to 1,877 Mboe.Reserves ReplacementIndex of 109% and reservesadditions of 252 Mboe.

Our value chain 87RefiningSupply and marketingProvision of low sulfur dieselthroughout Colombia.Start of operations at the OptimizationCenter of the BarrancabermejaRefinery.74%progress in themodernizationof the Cartagena refinery. Progress forBarrancabermeja was 14%.Sales volume increased 3% comparedto 2011 and reached 880.5 Kboed.increase in exportvolume, reaching5.6%521 kbd.Ecopetrol participatesin all stages of thehydrocarbon chain,from the explorationand production ofoil and gas, to theirprocessing into highervalue-added products,and their subsequentmarketing in national andinternational markets.TransportThe volume of crude and productstransported increased 1.2% to 1.2million barrels per day.progress for61%OleoductoBicentenario.Pipeline capacityincreased to 91,000 barrels per day.The integrity and contingencyprograms were strengthened.Cenit was created, an affiliatespecializing in hydrocarbontransportation and logistics.Innovation and technologyColciencias certified researchin Ecopetrol in 2012 of US$86.15 million.21new patentswere granted (13in Colombia, fourin Mexico, two inRussia, one in Peru and one inthe United States).

88ExplorationThe first link in the hydrocarbon chain is exploration, whichbasically consists in carrying out activities aimed at finding newreserves of hydrocarbons, including specific aspects such asseismic, its interpretation and the drilling of exploratory wells.Tisquirama East (San Martín, Cesar)

Our value chain89Among the main exploratory activities that wereconducted in 2012 are the following:Table 18.A3/A1 and stratigraphic wells drilled by Ecopetrol – 2012Activity 1Maturation andgeneration of technicallyand economically viableprospects that added toand strengthened theexploration portfolio.Quarter Type of well Basin Block Name1 A3/A2 VMM Tisquirama Tisquirama Este-12 A3/A2 VMM Tisquirama Caronte3 A3/A2 VMM Playón Aullador-13 A3/A2 LLA Caño Sur Embrujo-1 ST2Activity 2Addition of new blocksresulting from RondaColombia 2012.3 A3/A2 OFF RC5 Mapalé1 Stratigraphic VMM VMM La Luna-12 Stratigraphic LLA CPO-9 Akacías EST-13 Stratigraphic LLA Caño Sur Cumanday-1Activity 3Discoveries in blocks:Caño Sur, Quifa, Playón,Tisquirama and RC 5.3 Stratigraphic LLA Caño Sur CSE-X-123 Stratigraphic LLA Caño Sur CSE-X-33 Stratigraphic LLA Caño Sur CSE-X-43 Stratigraphic LLA Caño Sur CSE-X-14SeismicIn 2012, 1655.4 kilometers equivalent ofseismic were recorded, which were acquiredin the region of Valle Medio Magdalena and inthe Colombian Caribbean offshore. Of the totalnumber of kilometers, 748.6 were acquired withEcopetrol as operator, and the remaining 906.9with it as a non-operator.DrillingIn terms of well drilling, in 2012 Ecopetroldrilled 32 A3/A2 and stratigraphic wells . Thefive successful A3/A2 wells were: TisquiramaEste-1, Caronte, Aullador-1, Embrujo-1 ST-2 andMapalé. Meanwhile, there were 18 successfulstratigraphic wells (see Table 18).3 Stratigraphic LLA Caño Sur CSE-X-113 Stratigraphic LLA Caño Sur CSE-X-9A4 Stratigraphic LLA Caño Sur CSE-X-74 Stratigraphic LLA Caño Sur CSE-X-104 Stratigraphic LLA Caño Sur CSE-X-154 Stratigraphic LLA Caño Sur CSE X-134 Stratigraphic LLA Caño Sur CSE X-84 Stratigraphic LLA Caño Sur CSE X-14 Stratigraphic LLA Caño Sur CSE X-24 Stratigraphic LLA Caño Sur CSE X-5Source: Ecopetrol, Vice Presidency of Exploration

90The heavy crude strategy within the exploratoryactivity performed in 2012, focused on the drillingof A3 and A1 well and the search for stratigraphicinformation in the Llanos Orientales blocks (CañoSur, Quifa, CPE-2, CPE -8, CPO-9 and CPO-11).At the end of 2012,there were fourexploratory A3 wells , 5stratigraphic wells and 1 A1boundary well in progress.As for the exploratory results ofaffiliates, Hocol S.A. drilled eight A3/A2and 13 stratigraphic wells. Four A3/A2 and sixstratigraphic wells were successful .Meanwhile, in the third quarter of 2012, EquiónS.A. drilled the Mapalé exploratory well. Analysesperformed in the fourth quarter revealed thepresence of gas in the well.Sur, Quifa, CPE-2, CPE -8, CPO-9 and CPO-11).Additionally, a seismic program was implemented,which recorded a total of 365.5 kilometersequivalent of information.52 wells were drilled in the aforementioned blocks:three A3, 26 A1 and 23 stratigraphic wells.Ecopetrol’s investments in exploration, both directand under shared risk, totaled US$ 420 million in2012, representing a decrease of 16.3% comparedto 2011 (see Figure 4).Ecopetrol America Inc. drilled three exploratorywells in the Gulf of Mexico (USA), of which two:Parmer and Damatian, showed the presence ofhydrocarbons.Savia Perú drilled two exploratory wells: Colan-1and Pelusa-1, which revealed the presence ofhydrocarbons, but were not considered commercialsuccesses.Finally, Ecopetrol Oleo e Gas do Brasil, drilled theboundary well Latuna 2 and three exploratory wellswere drilled, of which two were declared dry: Sabiáand Canario, while the third, Jandaia, was underassessment at the end of the 2012.Figure 4.Exploratory investment(Figures in millions of dollars)600.0500.0400.0300.0200.0510.0258.4502.0420.0Heavy crudeThe heavy crude strategy within the exploratoryactivity performed in 2012, focused on the drillingof A3 and A1 wells and the search for stratigraphicinformation in the Llanos Orientales blocks (Caño100.00.020092010Source: Ecopetrol, Vice Presidency of Exploration20112012

Our value chain91Proven reservesNet proven reserves of hydrocarbons owned byEcopetrol, including its participation in subsidiariesand affiliates, amounted to 1,877 million barrelsof oil equivalent (Mboe) at the end of 2012,representing an increase of 1.1% compared to the1,857 Mboe in 2011.RepsolThese reserves were calculated based on thestandards and methodology of the Securities andExchange Commission of the United States (SEC,which does not include royalties) and were auditedat 99% by three different independent specializedcompanies (Gaffney, Cline & Associates, RyderScott Company and DeGolyer and McNaughton).ShellTalismanRonda Colombia 2012Ecopetrol submitted the best bids for 12 explorationblocks in Ronda Colombia 2012 held by the NationalHydrocarbons Agency.ONGGSK InnovationOf the 12 blocks, Ecopetrol has a 100% sharein six of these, and in the remaining six, bidswere submitted in joint ventures with Anadarko,ExxonMobil, Repsol and Hocol.HocolThe total area of these blocks is 3.1 million hectaresand are located in the following basins: Llanos,Valle Medio del Magdalena, Caguan-Putumayo,Caguán-Putumayo, Catatumbo, Cordillera and theColombian Caribbean Offshore.AnadarkoMetapetroleumIn 2012, 252 Mboe were added to proven reservesand net production was 232 Mboe. The reservesreplacement index in 2012 was 109%.The reserves / production ratio, assuming thesame level of production in 2012 is maintained, is8.1 years. The increase in proven reserves camemainly from expansions in proven area, improvedrecovery, and revisions of previous estimates insome fields.Work with partnersIn 2012, Ecopetrol continued its strategy ofstrengthening its partnerships with world-classcompanies. Standing out are Repsol, Anadarko andExxonMobil, among others. It has sought to generatelong-term relationships of mutual benefit to leveragegrowth and the fulfillment of future targets.At December 31, 2012, Ecopetrol had 12 partners forexploration activity in Colombia, which are listed inTable 19.EquionHessPetrobrasExxon Mobil

92ProductionThe second link in Ecopetrol’s value chain is oil and gasproduction, which is carried out directly or in partnership withother companies (see Table 19).Campo Toldado

Our value chain93Table 19.Production partnersType of agreement Country Name FieldType ofhydrocarbonCompaniesCaracara Agreement Extension Torosentado West Medium Crude CepcolsaCarare Las Monas Agreement ExtensionCorazón West Medium Crude PetrosantanderRubiales Agreement Extension Rubiales Heavy Crude MetapetroleumPirirí Agreement Extension Rubiales Heavy Crude MetapetroleumExtensionAgreementColombiaNare Agreement Extension Under River Heavy Crude MansarovarPiedemonte Agreement Extension Pauto Light Crude EquiónEspinal RSA Agreement Extension Matachín Norte Medium Crude PetrobrasNare Agreement Extension Abarco Heavy Crude MansarovarNare Agreement Extension Moriche Heavy Crude MansarovarNew Commercial AreasAgreementColombiaRondón Agreement Extension Caño Rondón Medium CrudeTisquirama Agreement CommercialViabilityChipiron Agreement CommercialViabilityTisquirama Agreement CommercialViabilityQuerubínChipironSerafínHeavy CrudeMedium CrudeGasOccidental deColombiaPetroleos delNorteOccidental deColombiaPetroleos delNorteQuifa Agreement Commercial Viability Cajua Heavy Crude MetapetroleumAddendum to CPI PalaguaAgreementColombia Addendum to Palagua IPA Agreement Palagua Heavy CrudeInsmocol, Joshiand ParkoSource: Ecopetrol, Vice Presidency of ProductionFigure 5.Equivalent production of oil and gas(Ecopetrol Participation), in KboedCrudeGasCrude EQ8002012 ProductionThe equivalent production of oil and gas byEcopetrol S.A. in 2012 was 702 Kboed (591 Kbodof oil and 111 Kboed of gas), representing growth of5% compared to the result in 2011. (see Figure 5).700600500400300200499934065809848267010057070211159110002009201020112012Source: Ecopetrol, Vice Presidency of Production

94When calculating Ecopetrol’s production includingits participation in subsidiaries and affiliates, oiland gas production in 2012 was 754 Kboed, 4.1%higher than in 2011. Of the total production 634.7Kbod was crude and 119.3 was gas.Of Ecopetrol’s total production, 53% (372 Kboed)corresponded to fields under joint operation, and47% (330 Kboed) to direct operation fields.During 2012, heavy crude accounted for 51% oftotal crude production.Breaking down crude production, it is seen thatthe direct production exceeds joint production(see Figure 6).During 2012, Ecopetrol’s production of heavy crudewas 303.6 Kbod, representing an increase of 9.1%compared to 2011 when it totaled 278.3 Kbod.Production fields that are currently in thecompany’s heavy crude program via directoperation are: Castilla, Caño Sur, reservoirs K1 andK2 in Chichimene; fields LLA 37, Chichimene, Apiayand Suria in the T2 reservoir, which contains extraheavy crude (less than 10° API).The following fields are under joint operation:Rubiales, Quifa, CPO9 and Camoa, in thedepartment of Meta, and Chicalá, Jazmín, Moriche,Girasol, Under River, Nare Sur, Teca, Cocorná andAbarco, in Valle del Magdalena Medio.Figure 6.Production of crude, Ecopetrol’s directand joint participation (Figures in Kbod)DirectJointTotal CrudeInvestments andcommercial viabilityIn 2012 the production investments budget totaled$8.07 billion, of which 64% corresponded todirect operation and 36% to investments in jointoperation. At December 2012, the execution of thisbudget was 78% and 849 wells had been drilled.700600500400300406208482234570280591276Moreover, four new declarations of commercialviability were issued, as well as 11 commercialarea extensions. This new commercial viabilitycorresponds to: Cajua (department of Meta);Querubín and Serafín (Valle del MagdalenaMedio), and Chipirón T (Catatumbo).2001000198248290315An addendum to the Palagua incremental productionagreement was signed, allowing Ecopetrol increaseits activity and reserves in this area.2009201020112012Source: Ecopetrol, Vice Presidency of Production

Our value chain95Natural Gas ProjectsDuring 2012, projects were introduced thatleverage the growth strategy in natural gasproduction in three plants:Cupiagua Gas PlantOn December 14, 2012 theCupiagua gas plant cameinto operation, which hasthe capacity to deliver 210MCFD of gas under RUTconditions to market.Additionally, this systemconsists of a transfer linebetween the Cupiaguafield and Cusiana, whichensures the entry ofCupiagua Gas to theNational TransportationSystem in Cusiana. Fromthere, there is capacityto evacuate 140 MCFDof Cupiagua Gas, andin the medium term itsexpansion to 210 MCFD willbe carried out.Sardinata Gas PlantThe Sardinata gasplant, located in Nortede Santander, becameoperational in November2012. Currently the planthas a delivery capacity of1.5 MCFD of gas for sales.Gibraltar Gas PlantCurrently the maximumdelivery of gas to sales is110 MCFD.The Gibraltar Gas Plantstarted operations in 2011with a maximum capacityof 36 MCFD. During 2012,between 28-30 MCFD onaverage were sold, andwork is currently beingdone towards deliveriesof 36 MCFD.

96TransportThe third link in Ecopetrol’s value chain is the transportationbusiness, which is carried out through a system of pipelinesand poliducts that carry crude from the production fields to therefineries or export ports.Network of pipelines that convergein the Barrancabermeja refinery

Our value chain972012 was a year of significant change for thetransportation business. In order to further consolidate thetransport model within the corporate group, the companyCenit Transporte y Logística de Hidrocarburos S.A.S wasestablished, an affiliate 100% owned by Ecopetrol.The objectives that motivated the creation thisaffiliate were to meet the transportation needs of thecountry’s producers in a comprehensive manner;give a greater sign transparency to the market, uponseparating the roles of owner, planner, operatorand shipper in the transportation systems; ensureequitable treatment in the transport system for all oilproducers now operating in Colombia, and promotethe participation of non-producer investors in thetransport business.Since the second half of 2012, Ecopetrol S.A. andCenit have been undertaking the transition process inorder to start its operation and functioning from thefirst half of 2013.As for the operation, in 2012 a volume of 1,218Kbod was transported, representing an increaseof 1.2% over 2011. Of the total volume transported,916.2 Kbod corresponded to crude and 302.7 Kbodcorresponded to refined products (see Figure 7).Figure 7.Transported volumes of refined products and crude(Kbod) - Annual Average799.520092235761,035.820102657712011Source: Ecopetrol, Vice Presidency of ProductionCrudeRefined1,204.5 1,218.9289 303916 9162012New businessThrough the rounds for firm transportationcapacity, in 2012 agreements were signed withCepsa and Petrominerales Colombia Limited forthe Santiago Porvenir Pipeline, as well as withMansarovar Energy Colombia, for the Galán-Ayacucho-Coveñas pipeline.Moreover, Ship or Pay and Ship and Pay contractedcapacity was signed with Occidental de Colombiaon the Galán – Ayachucho – Coveñas system, inaddition to capacity contracted on the Araguaney -Porvenir system with Equión.Additionally, Ship or Pay agreements were signed forthe Araguaney Plant’s unloader with Petromineralesand Metapetroleum, as well as firm capacityagreements with Metapetroleum Corp - Colombianbranch and Petrominerales.

98CapacityincreasesIn 2012 Ecopetrol achieved capacity increases inmain oil pipelines, afferent pipelines, loaders andunloaders, poliducts and gas pipelines.The main oil pipeline systemswent from having a nominalcapacity of 1,109.5 Kbod in 2011,to 1 20 0 Kbod in 201 2.While the main poliduct systemswent from having a capacity of 423.4Kbod in 2011, to 426.0 Kbod in 2012.Increases in thePoliduct Network40 Kbod increase in thetransport of diluent by pipelinefrom Apiay to the Acacias,Chichimene and Castillaproduction fields.15 Kbod capacity increase inthe Pozos Colorados - Galánsystem, which went from 90to 105 Kbod.Increases in theMain OilPipeline NetworkIncrease in transport capacityin the Vasconia-GRB-Galánsystem of 12 Kbod. Thenominal capacity went from168 to 180 Kbod.Increase in the capacity ofthe Transandino Pipeline of12 Kbod. Went from 48 to60 Kbod.Increase in the pumpingcapacity in the Ayacucho -Coveñas corridor of 14.5 Kbod.It was increased from 60.5 to75 Kbod (16” line).Increase in the GasPipeline NetworkCommissioning of theCupiagua - Cusiana pipelinewith a capacity of 1.1 millioncubic feet.Increases in theAfferent PipelineNetworkIncrease in pumping capacityfrom 36 to 54 Kbod in theMonterrey-Porvenir system(12” line).Increase of 19 Kbod, from16 Kbod to 35 Kbod. This isdue to the commissioningof the Galán - Ayacuchosystem, which enables theevacuation of productionfrom the La Cira and Isla VIfields, through a 14” line.

Our value chain99Storage:The arrival of the TK 142 tanksin the Puerto Salgar plant with arehabilitated capacity of 56 Kband tank 403 with a capacityof 50 Kb in the Apiay Plant,completing their maintenanceactivities without impactingincreased nominal capacity.Entry into operation of theAyacucho II refined productspumping and storage station, toimprove capacity and reliabilityin the transportation of diluentand refined products from thePozos Colorados-Galán system,reaching a capacity of 300 KBLS.IntegrityprogramThe integrity program, which aims tostrengthen the current system for themanagement of operating risk that impactsthe integrity of the transport systems and theenvironment operated in, has strengthenedthe risk management model and incorporatedimprovements in the identification, assessmentand management of risks from different threats,particularly in relation to weather and damageby third parties.To obtain these improvements, new technologiesto monitor the infrastructure, right of way andthe environment have been introduced; theinspection and maintenance routines have beenreviewed and adjusted, and pipe replacementprojects have been structured and executed inareas where their level of susceptibility may causeincidents with major consequences. For moreinformation on Ecopetrol’s Risk ManagementSystem, please consult Chapter 5 Economic andFinancial Dimension, in this report.Increases inLoaders andUnloadersIncrease from 20 to 30 Kbod inthe capacity of the tank truckcrude loader in Castilla.

100Refining andpetrochemicalsThe fourth link in the value chain is the refining andpetrochemicals activity, which has its origin in theBarrancabermeja and Cartagena refineries, where crude arrivesfrom the fields and is transformed into value-added products,creating jobs and boosting regional economies.Barrancabermeja Refinery

Our value chain101The Cartagena refinery achieved the consolidation of accumulatedbenefits of US$ 13.5 million, through optimizing the use of naphtha andbutane streams in the blending (mixing) of products, the delivery of 217Kb of naphtha for the dilution of heavy crude, commencing the deliveryof diesel with 50 ppm of sulfur to the northern coast, and the fourthconsecutive year of certification in ISO 14001, 9001 and OHSAS 18001.The Barrancabermeja refinery also contributed tocompliance with the new specification of 50 ppm sulfurdiesel for the country since October. It reached recordlevels in polyethylene production of 4,900 tons duringthe month of July, in addition to recertification of themanagement system for the Barrancabermeja refineryin standards ISO 9001 and NTCGP 1000.Gross marginThe cumulative gross refining margin in 2012 wasUS$ 9.47 per barrel, which represented US$ 0.58per barrel less compared to the previous year.Although loaded crude showed a decrease in itsprice, the basket of products showed a largerdecrease, affecting the margin compared to 2011(see Figure 8).Loads to refineriesThe volumetric compliance of crude oil loadsfor the business was 98% against the targetset for 2012.The result for the Barrancabermeja refinerywas impacted compared to 2011 due to theextension of the major maintenance of unitsthat process vacuum bottoms and the U2000crude unit, while the results of the Cartagenarefinery were also impacted by the reducedavailability of light crude during the first halfof the year, due to the public order situationon the Caño Limón-Coveñas Pipeline(see Figure 9).Figure 8.Cumulative gross refining margin 2012Figure 9.Crude loads (Figures in Kbcd)GRBGRCTotalUS$/BL10.059.209.649.809,629.4729679293683037729475217 225 226 2192011Aug. 12Sept. 12Oct. 12Nov. 12Dec. 122009201020112012Source: Ecopetrol, Vice Presidency of Refining and PetrochemicalsSource: Ecopetrol, Vice Presidency of Refining and Petrochemicals

102Refineriesmodernization planDuring 2012 work was done on variousmodernization projects to upgrade refineriesto meet new industry challenges.The result for the refineryutilization factor was 75.7%,lower than in 2011 mainly dueto the extension of the crackingunit shutdown for work emergingother than that planned, whichoccurred during the first halfof the year in the Cartagenarefinery, and the prolongation ofthe Orthoflow unit shutdown inthe Barrancabermeja Refinery.Direct investment in 2012 in therefining business was US$ 406.2million, corresponding to theexecution of 45 projects.BarrancabermejaRefineryModernization Project(PMRB)This project seeks to adaptthe infrastructure of theBarrancabermeja refineryto process heavy crudes andupdate its configuration totake it from medium to highconversion.During 2012, progresswas made in the planningof the main contracts,construction activities forthe modification of the U-250crude unit were initiated,and forest use activities andwildlife relocation activitieswere carried out within theparameters established bythe Regional AutonomousCorporation of Santander.Cartagena MasterDevelopment Plan(PMDC)Seeks to expand therefinery’s capacity from 80Kbd to 160 Kbd.In 2012, the project’sconstruction stagecontinued, whichrecorded physicalprogress of 76.7% with17.8 million man-hoursworked in 2012.Direct refininginvestmentUS$406.2million45projectsDetailed engineeringachieved progress of5.67%, while the purchasingof materials and thecontracting of servicesreached 5.15%, for an overallproject progress of 13.81%Assembly was successfullyperformed for the crackingunit’s main equipment,with the plant in operation,without incident.

Our value chain103Industrial ServicesMaster Plan (PMSI)Petrochemicalinfrastructure growthprojectFuel qualityimprovementprogramThe aim of this project,which in 2012 recordeda progress percentageof 61.44%, is to increasereliability and efficiencyin the generation ofindustrial servicesfor the operation ofthe Barrancabermejarefinery, reducingenvironmental impact.A plan was structured andexecuted to review andupdate the business, as aresult of structural changesin the petrochemicalindustry during the lastyear due to the increasedavailability of low-cost rawmaterials derived from thedevelopment of shale gas inNorth America.In line with internationaldevelopments and identifyingfuture quality scenarios forfuels produced Ecopetrol(both diesel and gasoline),in 2012 conceptual designswere progressed for theadjustments required in therefining and transportationinfrastructure, and the prefeasibilityof the program’simplementation wasapproved.With the modernization and expansion of therefineries, Ecopetrol will be able to delivervalue-added and environmentally friendlyproducts to the marketConceptual engineering iscurrently being developedso as to guarantee theproduction and distributionof fuels with better qualityspecifications, taking intoaccount the synergieswith fuels produced in theCartagena Refinery, oncethe modernization projectcomes into operation.

104Supply andmarketingThe fifth link in the value chain is the sale of crude oilproduced in the fields, as well as the products coming out ofthe refineries to meet domestic and international demand.It is also related to imports that must be made, such asnaphtha used in the transportation of heavy crude.Tanker with crude bound for India

Our value chain105During 2012 sales revenue totaled $ 59.5 billion,representing an increase of 5.4% compared to 2011(see Figure 10).The previous year saw a 3% increase in salesvolume compared to 2011. This increase isexplained by a 5.6% increase in exports, particularlycrude oil exports, which increased 7.5%.ExportsThe value of exports was US$ 19,127 million, whichrepresented an increase of 19% compared to 2011,when they totaled US$ 16,072 million.The increase in exports was due to the increase in the volumeexported, which rose from 494 Kbed in 2011 to 521 Kbed in2012.Standing out were foreign sales of Vasconia and Magdalenacrude, which offset lower exports of Castilla crude, SouthBlend crude and fuel oil (see Figure 11).The export basket’s price rose by US$ 4.85 per barrelcompared to 2011, mainly due to the higher price of Mayacrude (US$ 0.97 per barrel) and Brent (US$ 0.82 per barrel)and the strengthening experienced by Castilla (US$ 5.37 perbarrel) and South Blend crudes (US$ 5.41 per barrel).Figure 10.Sales revenueFigure 11.ExportsCOP billionMM USDCOP billionMM USD7000070000600005000056,49259,525600005000016,06219,1274000035,1904000011,4203000026,976300006,0045,8252000010000012,55816,65227,26330,3572000010000014,721 12,55816,65227,26334,241200920102011201220082009201020112012Source: Ecopetrol, Vice Presidency of Supply and MarketingSource: Ecopetrol, Vice Presidency of Supply and Marketing

106Gasoline sales76,974BdpDiesel sales110,746Bdpthe Caribbean (56%), the Far East (16.4%) andthe Atlantic Coast of the United States (12.9%).Meanwhile, the share of product exports to the UnitedStates’ Gulf of Mexico Coast between 2011 and 2012,went from 32.9% to 7.1%.In turn, imports grew 13.8% in 2012 compared to2011, and increased from 80.1 Kbed to 91.1 Kbeddue the purchase of greater volumes of naphthadiluent for heavy crude pumping and greater petroland diesel requirements.The price of Castilla was supported by demandfrom Asian refiners, while the price of SouthBlend saw the best price levels obtained in loadsexported to South America.One reason that explains the strength of thesespreads is the commercial management undertakento increase the use of markers such as Brentand Maya, replacing WTI, whose price becamedisconnected from the international market,becoming a more volatile and less reliable marker inthe current conditions.The strategy of geographical diversification madeit possible to continue the deconcentration of oilexports to the United States’ Gulf of Mexico Coast,which passed from a share of 52.4% to 43.5%.Standing out, meanwhile, is the growth of sales tothe Far East which rose from 13.2% to 20.3%. Otherdestinations that saw increases in sales during 2012were: Europe, the West Coast of the United States andCentral America, passing from 5.2% to 8.3%, from7.7% to 8%, and from 1.6% to 4.3%, respectively.It has also been possible to diversify product exports.The main destinations in order of importance are:National salesStanding out in national sales is the increaserecorded in the volume of crude oil (150%) and fueloil (233%) thanks to the strategy implemented inthe fuel market for boats.Gasoline sales reached 76,974 Bpd, whichrepresented an increase of 3.3% compared to theprevious year. Meanwhile, diesel sales rose 1.6%,corresponding to 110,746 Bpd compared with2011, due to the growth of the mining industry anddemand from the thermal sector for new uses.In terms of petrochemical and industrial products,including the Free Trade Zone, there was adecrease of 11% in volume and 14% in revenuescompared to 2011, due to lower product availabilitythat necessitated the import of RGP (RefineryGrade Propylene), base oils and paraffin to meetcommercial commitments.Natural gasIn 2012, national and export demand for natural gasreached a record of 1,090 Gbtud year average, 2.6%more than in 2011. Ecopetrol served 614 Gbtudof this demand, including its own consumption,representing a total market share of 56.3%.

Our value chain107New projectsDuring 2012, progress was made inmaturing three business initiatives that aresummarized below:This year, the national market required 904 Gbtud,which represented an increase of 5% compared to2011, primarily due to increased thermal demand,both on the Coast and inland. Exports during the sameperiod were 186 Gbtud, representing a decrease of 9%compared to that reported in 2011.Initiative 1Expansion of productioncapacity in the Ecodieselbiodiesel plant, whichmoved forward in Stage 2.During 2012, Ecopetrol sold 498 Gbtud of natural gas,which represented a decrease of 14% compared to2011 in total sales to third parties (national and exportmarket, not including own consumption).Ecopetrol’s own consumption showed an increase of3 Gbtud, 2.6% higher than that consumed in 2011,mainly attributable to increased demand from theBarrancabermeja Refinery.The reduction of 14% in Ecopetrol’s sales of naturalgas was caused by a change in the managementof royalties, resulting from regulatory definitionsstipulated in Decree 2100 of 2011.These definitions forced that a significant portion ofthe royalties that Ecopetrol previously bought fromthe ANH and which it subsequently marketed aspart the gas it owned, now be marketed in the ANH’sname, through a mandate agreement, and be sold byother producers from 2012.Initiative 2Co-processing of palm oilwith fossil diesel streamswithin the hydrotreatingunits in the BarrancabermejaRefinery (Biocetano):a project that movedforward in Stage 2 andin technical, policy andregulatory definitions, andincorporated the Refiningand PetrochemicalsDevelopment Departmentinto its team to continue itsmaturation.Activity 3Production of biofuelfeedstock from the use of theproduction waters from theCaño Sur Este field, which isin Phase 1.More information on thesenew projects is containedon page 174, Chapter 4Environmental Dimension,in this report.

108The further, the betterFor the first time since 1986, when Colombiareactivated its oil exports, the Far East has taken theplace of the Gulf of Mexico’s coast, United States, asthe main destination for Ecopetrol crude.Colombian Oil has always had a privileged positionin the North American market, as due to the deepconversion capacity of its refineries, the various typesof crude exported by Ecopetrol are well suited to theirrefining system and it allows them to produce highlyappreciated middle distillates, such as diesel.In 2009 Ecopetrol designed a destinationdiversification strategy and began exploring newmarkets, whose first results led to shipments of onemillion barrels of oil to various destinations in themiddle and far East.Later, emerging economies such as China andSingapore, as well as Japan, entered the list ofbuyers of the heavy crudes offered by Ecopetrol,especially Castilla and Vasconia crude, fromthe Llanos and Magdalena Medio basins,respectively.Contract with IndiaAlso playing a leading role within thediversification strategy in the ​internationalmarketing area, was the trade agreement made ​in July 2012 between Ecopetrol and a majorprivate refining company in India to supply themwith 12 million barrels of Castilla crude for a year,in shipments of 2 million barrels.

Our value chain109Good practiceThe contract value was US$ 1,200 million andfor Ecopetrol it signified the strengthening of itsbusiness strategy to supply crude to end users.This export contract offers advantages to Ecopetrolbecause it ensures the systematic sale of crude witha prior price agreement.Additionally, direct delivery to the buyer’s countrygenerates more control over the final destinationof the oil and gives Ecopetrol flexibility in terms oflogistics for the shipment of oil.With this contract, Ecopetrol is not only diversifyingits export destinations, which during the firsthalf of 2012 grew by 23.3%, but it is also buildingexperience in the transportation of its crude inships on long routes, which opens the door to newbusiness in the Middle and Far East.For the first delivery under this agreement, Ecopetrolhired one of the world’s most modern tankers withinthe category of VLCC (Very Large Crude Carriers), builtin 2010. So, this last July 29, the tanker departed forIndia with the first 2 million barrels of Castilla crude ona journey that, port to port, took 35 days.Historic turning pointoil volume was exported to the Far East, followed by28.6% to the Gulf of Mexico’s Coast, which representsa historic turning point in the export map, shifting themain focus of its destination market after 26 years ofinternational operations.The rest of the oil exported by Colombia correspondsto 8.2% to Europe, 7.1% to South America and 5.4% tothe West Coast of the United States.This continuing trend of exporting greater volumesto Asia than to the Gulf of Mexico has arisen due totwo factors: North America’s reduced dependenceon foreign crude, given the increase in its domesticproduction, and the ability of Ecopetrol expertsand analysts to create a picture of threats andopportunities, within which it was possible toanticipate the fall in demand from the Gulf market andthe emergence of new players such as the Far East.Additionally, Ecopetrol has obtained economic benefitsfrom the market diversification strategy, since eachbarrel of the company’s oil has better returns whensold to customers in Asia.Thus, according to the company’s official statistics,in the fourth quarter of 2012, 30.4% of Ecopetrol’s

110Innovationand technologyIn 2012 Ecopetrol created the Vice Presidency of Innovationand Technology in order to direct and drive the companytowards adding value to the business chain by managinginnovation, technology, knowledge, as well as developingcompetitive advantages..Colombian Petroleum InstituteLaboratory, ICP

Our value chain111Economic benefits424.8Million dollarsFalling under this Vice Presidency is the ColombianPetroleum Institute (ICP), a research anddevelopment center for the oil industry, located inPiedecuesta (Santander), created on June 11, 1985.As a result of the application of technologicalsolutions in the company’s operating areas, in 2012economic benefits were generated, certified by thebusinesses, for a value of US$ 424.8 million.The application of these solutions representedbenefits of US$ 328.4 million for the operatingbusinesses, and US$ 96.4 million for the ColombianPetroleum Institute.On average, in the last five years, the benefits ofapplying technological solutions have exceededthe annual budget executed by the ICP by morethan six times.ICP Technological solutionsSome of the results of greatest impact for Ecopetroland its companies in 2012 were:In the exploration of terrestrial basins in Colombia,models were established that made it possible todifferentiate the petroleum systems of the basins ineastern Colombia and that confirm that the OrinocoBelt is an independent oil system.In synergy with Hocol, static geological modelswere made for two Hocol blocks and one for thewestern sector of the Caño Sur block, based on whichthe volume of prospective oil sands resources wasestimated in the former, and heavy crude in the latter.A contribution was made to the understanding ofthe Caribbean region with comprehensive maps ofgeological and geochemical information on the SanJacinto-Sinú Basin.In the Caribbean offshore, the distribution ofmethane hydrates present in the ColombianCaribbean was honed, which serves as an input forgeotechnical risk assessment of the areas whereoffshore facilities are to be located.Ecopetrol’s first pilot on enhanced recovery throughchemical injection was completed, with an initialincrease in production of 130 Bopd and a projectionfor 2020 of 202,000 accumulated barrels.Through integrated petrophysical characterization,potential areas of Shale Gas were identified in theLuna-1 Well.The development of a catalyst was completed for thefluidized catalytic cracking process, FCC, which iscapable of producing high yields of diesel.In biofuels, the experimentation phase beganfor lignocellulosic ethanol production with thedefinition of methodologies for the characterizationof biomass (sugarcane bagasse, banana rachis andpalm rachis) and pre-treatment and enzymatichydrolysis for banana rachis.

112Knowledge managementand intellectual capitalDuring 2012, progress was made in securingmore than 44 key operational practicesacross the organization, as well as fourtechnological strengths.In terms of intellectual capital, Ecopetrol is thenational company with the most patents grantedand requested in Colombia.In 2012, nine new patent applications were filed,completing 126 in the last seven years, andclosing the year with 21 new patents granted: 13in Colombia, four in Mexico, two in Russia, one inPeru and one in the United States, for a total of 44patents in force.Laboratories and pilot plantsIn 2012, international quality standards weremaintained, with scores above 95% in therepeatability and reproducibility programsundertaken with about two thousand ASTMinternational laboratories (American Society forTesting and Materials), the Petroleum Institute inthe United Kingdom (PI) and Shell, among others.Standing out is the set-up and implementationof methodologies in exploration laboratories tosupport the Unconventional Reservoirs area,particularly on the issue of Shale Gas.Support for scienceand technology in the countryThe ICP ended 2012 with 62 technologicalcooperation agreements: 27 with nationaluniversities, 18 with national entities and 11 withinternational entities.Through these agreements, resources wereallocated to support 450 students from researchincubators, 150 of them in graduate programs. Themanagement of these agreements in 2012 signifieda contribution by Ecopetrol of $36,459 million, ofwhich $30,540 million was executed.

Our value chain113Also standing out was the company’s supportto the training of high-level human talent bystrengthening strategic alliances with Colfuturoto grant 36 partial scholarships for Colombianprofessionals from oil regions.Similarly, a program was taken forward with theFulbright Foundation, which made it possible for10 Colombians to undertake postgraduate studiesin the United States, and ​a contribution of $690million was made to Colciencias to support tuitionfor national doctoral training in innovation, withinthe field of energy for the future.Recognition from ColcienciasIn 2012, Colciencias awarded Ecopetrol’sColombian Petroleum Institute (ICP)recognition as a research center.This formalization is valid for three years andis part of a new provision from Colciencias sothat Research and Development (R&D) centersor research groups can take part in calls for taxdeductions for R&D projects or participate inother mechanisms for the promotion of scienceand technology, offered by that institution.During 2012, Colciencias certified research inEcopetrol of $86.15 million in 2011, focused onadvances and innovations for the hydrocarbonindustry. Ecopetrol established itself as thenational company with the most projectscertified by Colciencias, in both total numberand the value thereof.Personnel fromthe ColombianPetroleumInstitute, atICP facilities.

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Economic dimension115Despite the complexities of the environment, thefinancial results of Ecopetrol S.A. in 2012 mark thesecond highest record in the company’s history.In this period, the company demonstrated itsstrength and ability to maintain competitiveindicators in the industry, supported by increasedproduction, the improvement in internationalreference prices, the execution of commercialstrategies that made it possible to increase sales,and a robust investment plan.At year end, Ecopetrol S.A.’s total sales grew 5.4%to reach $59.5 billion, mainly due to a 2.7% increasein sales volume and a 5.8% increase in the crudeexport basket.The diversification of export destinations wasrelevant to these results, especially the Far Eastwhere 20% of foreign sales of crude were bound.Profits in turn, were consolidated as the secondhighest in the company’s 61 year history, reaching$14.9 billion. In 2011 this result was $15.4 billion.

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Economic dimension117Income statementDuring 2012, cost of sales experienced an increase of13.5% ($4,030 billion) explained by the behavior ofvariable costs that saw a net change of 11% ($ 2,551billion) and fixed costs whose net change was 21.6%($1,480 billion).The change in variable costs was due to purchasesof hydrocarbons from the National HydrocarbonsAgency (ANH) and third parties of $ 753 billion,imports of $ 597 billion, amortization and depletionof $ 324 billion, and hydrocarbon transportationservices of $ 363 billion.The change in fixed costs is explained by theincreased execution of contracted services ($ 479billion), the increased subsoil activity, maintenanceand field support, higher treatment costs due to highunexpected water cut and BSW (Basic sedimentand water), increased workover, and repair andreplacement of transfer lines.This was also due to the increase maintenance andrepairs ($ 384 billion), mainly for the maintenanceand repair of lines ($ 238 billion), schedulingshutdowns of $ 43 billion (Viscosity Reducer II,Demex, Bottom Train), reconditioning, well serviceand rodding ($ 130 billion, labor costs of $ 205 billiondue to an increase in the workforce and update tothe actuarial calculation.Operating expenses grew by $ 498 billion, mainlydue to the $ 414 billion increase in operating andmarketing expenses, and exploration expenditureestimated at $ 84 billion.With these results, the operating margin in 2012 was38.4% compared to 43.1% in 2011.The non-operating loss decreased by $ 206 billioncompared to the previous year. This change wascaused by the net effect between a lower financialloss of $ 492 billion (hedges and devaluation effectin 2011), a loss of $ 211 billion due in particular tohigher health costs for retirees, and a loss in the netincome of subsidiaries of $ 75 billion.The decrease in income tax expense comparedto 2011 is mainly due to the decrease in incomebefore taxes of 5.7% and the deferred taxadjustment in respect of the valuation of fixedincome investments.Earnings per share amounted to $ 364.16compared to $ 379.97 in 2011. The net margin was25% versus 27% last year.EBITDA, amounting to $ 27,573 billion, showed adecrease of 2%, and the EBITDA margin passedfrom 49.8% to 46.3% in 2012.Balance sheetThe balance sheet at the end of 2012 showed anincrease of 18% in assets over the previous year,i.e. they grew $ 15.3 billion and ended 2012 at $100.6 billion.Current assets increased by $ 2 billion dueto increased surplus cash and temporaryinvestments for dividend payments in January2013 and increased prepayments and advances toofficial agencies on account of income tax for the2012 tax year.In accounts receivable, the fuel price differentialwas $ 1.08 billion, of which Q4 2011 and 2012 arepending payment.Total liabilities closed at $ 35.3 billion, 17% higherthan in 2011, mainly due to the account payablefor dividends to the Nation of $ 3.9 billion and theincreased amount payable to suppliers of $ 2.02

1189%3%Figure 12.Operating income 2012(Figures in billions ofpesos)31%57%Exports 34,241Domestic sales 18,341billion, 71% higher than 2011, due to changes in theguideline set.23%8%FTZ Sales 5,293Service sales 1,650Figure 13.Costs and expenses 2012(Figures in billions ofpesos)69%At the end of 2012, financial obligations werecomprised of $ 2.2 billion of syndicated loans withColombian banks, of which $ 621,000 million hasbeen amortized, and $440,000 million of capital isexpected to be amortized in 2013.Also outstanding is the 2009 US$ 1,500 millionbond issue, the Internal Public Debt Bond Issue of $ 1billion, and the Gibraltar Gas Plant Contract (BOMT),with a balance of $ 100,000 million since November2012.Variable Costs 25,489Fixed Costs 8,329Also part of this group are liabilities and provisions,both short and long term, which increased by $178,000 million for litigation, commutable pensionobligations, provision for abandonment costs andprovision for emergencies.Operating Expenses 2,850Equity totaled $ 65.2 billion, 19% more than inthe previous year and at the end of the period itaccounted for 65% of the company’s total assets.-10%Figure 14.Non-operating result(Figures in billions ofpesos)Figures 12, 13 and 14 show Ecopetrol’s operatingincome, costs, expenses and non-operating results.21%-69%Non-financial Net (1,582)Results in companies 477Financial Net (226)Source: Ecopetrol, Vice Presidency of Corporate Finance

Economic dimension119Results in costsThe cost results for 2012 in thecompany’s main businessescompared to 2011 are summarizedas follows:Exploration and productionNotwithstanding the greater equivalentproduction of 6.9 million barrelscompared with 2011, operating costsincreased by 13%.This was due to the high levels ofwater production, which stood at 2.3million barrels per day, which requiredincreased efforts in the treatment,management and disposal of fluids,consistent with the commitment to notaffect the environment.Also, there were higher costsassociated with shutdowns of majorpipelines in the country due to publicorder problems, which impactedproduction targets.TransportThis segment showed an increaseof 38% compared to 2011, of which80% corresponds to the pipelineand tank integrity strategy, whichseeks to reduce operational risk andincrease quality standards to ensurean environmentally and sociallyresponsible operation.There were also higher costsassociated with the remediationof conditions that public ordersituations generated on the transportinfrastructure.DownstreamThe operating cost of theBarrancabermeja Refinery showeda decrease of 3% compared to 2011,mainly due to the optimizationof refining processes and greaterefficiency in the maintenance offacilities.Cost optimizationsContinuing the operationalexcellence strategies undertakenby Ecopetrol in all business areas,cost optimizations were of US$ 244.9million, which made it possible topartially offset the costs that greateroperational and environmentalcomplexity generated on thecompany’s operations.

120Financial indicatorsThe main financial indicators are liquidity, debt,profitability, activity, solvency and cost of sales,which make it possible to observe the financialhealth of the company.Table 20.Unconsolidated financial indicators(Figures in millions of pesos)Liquidity indicators 2012 2011 2010 2009Working capital in millions of pesos (Current assets /Current liabilities)Current Ratio(Current Asset / Current Liability)Quick ratioratio (Current assets - Inventories) / Current liabilities(1,586,579) 2,006,464 208,567 3,003,1170.9 1.1 1.0 1.50.8 1.0 0.8 1.2Source: Ecopetrol, Vice Presidency of Corporate FinanceLiquidityThis represents the safety margin that the companymaintains to cover fluctuations in cash as a result ofasset and liability operations.At year-end, current assets showed a variation of 13%compared to the previous year. The concentrationwithin assets is non-current, i.e. 82% compared tocurrent assets of 18% .The decreasing variation in the indicator is due to theeffect of current liabilities arising from the payment ofdividends to the Nation, of $ 3.91 billion, which will bepaid in January 2013.DebtThis indicator represents the proportion of thecompany’s investment that has been financed withdebt, i.e. third-party resources (see Table 21).Total liabilities increased by $ 5.14 billion, 17%compared to 2011.Ecopetrol has split long term borrowing to finance itsinvestment plan through internal public bonds, foreigncurrency debt and loans with domestic banks.ProfitabilityProfitability indicators showed a decrease relativeto the previous year, arising from lower operatingincome (5% less than 2011) due to a 16% increasein costs, mainly in crude and product purchases atinternational prices, transportation costs, as wellas maintenance and supplies, among others, whichgenerated an operating margin of 38%.Meanwhile, in terms of the net margin, there wasan increase in sales of $3,032,264 and a decreaseof 3% in profit relative to the previous year (seeTable 22).The company’s ability to generate profits throughthe use of invested capital (ROE) stood at 23% asa result of the increase in equity of $ 10,247,474,primarily through the appropriation of reserves andthe surplus from the appreciation of fixed assets.

Economic dimension121Table 21.Unconsolidated financial indicatorsDebt Indicator 2012 2011 2010 2009Level of indebtedness(Total liabilities / Total assets)Total financial leveraging(Total liabilities / Equity)Short-term concentration(Current Liabilities / Total Liabilities)Long-term concentration(Current Liabilities / Total Liabilities)35% 35% 36% 38%0.5 0.5 0.6 0.655% 46% 39% 32%45% 54% 61% 68%Source: Ecopetrol, Vice Presidency of Corporate FinanceTable 22.Profitability IndicatorProfitability indicator 2012 2011 2010 2009Operating margin(Operating profit / Sales)38% 43% 36% 28%Net margin (Net profit / Sales) 25% 27% 23% 19%Return on assets - ROA(Net profit / Total assets)Return on equity - ROE(Net profit / Equity)15% 18% 13% 10%23% 28% 20% 16%EBITDA 27,572,592 28,130,326 16,479,882 10,448,034EBITDA margin 46% 50% 45% 38%ROA (Return on assets) 15% 18% 13% 10%ROE (Return on equity ) 23% 28% 20% 16%Source: Ecopetrol, Vice Presidency of Corporate Finance

122Activity indicatorThis is the sales volume generated byworking capital and total assets (see Tables23, 24 and 25).Investment portfolioAt the end of 2012, Ecopetrol’s financialinvestment portfolio totaled $ 10,634billion equivalent, characterized by suitablediversification across economic sectors, its highliquidity and high credit quality.Table 23.Unconsolidated financial indicatorsActivity indicators 2012 2011 2010 2009Total asset turnover(Net Sales / Total Assets)0.6 0.7 0.6 0.5Investment returnsReturns on resources in pesos and dollars, bothremained above their benchmarks at year-end,responding to the company’s different liquidityneeds through a diversified portfolio (see Figures15 and 16).Source: Ecopetrol, Vice Presidency of Corporate FinanceTable 24.Unconsolidated financial indicators(Figures in millions of pesos)Cost of sales 2012 2011 2010 200933,817,770 29,257,190 21,622,382 17,809,194Source: Ecopetrol, Vice Presidency of Corporate FinanceTable 25.Unconsolidated financial indicators(Figures in pesos)Profit indicator 2012 2011 2010 2009Earnings per share 364.16 379.97 206.22 129.87Source: Ecopetrol, Vice Presidency of Corporate Finance

Economic dimension123Budget executionDuring the session held on November 18, 2011,Ecopetrol’s Board of Directors approved the budgetfor the year 2012, with a reference WTI of US $70 perbarrel and an average exchange rate for the yearestimated at $1,780.Figure 15.Investments (pesos)12.0010.00Return COPBenchmark COPAt year-end, the benchmark WTI closed at US$94.2 per barrel and the representative marketexchange rate ended at $1,797. These variationsand the increase in Ecopetrol’s productionpositively impacted on the company’s income,resulting in greater income, more transfers to theNation, and higher dividends for shareholders.8.006.806.004.004.06 4.602.0005.713.474.09200920102011Source: Ecopetrol, Vice Presidency of Corporate Finance6.4120125.71The company began operations in 2012 withavailable resources of $ 9.2 billion and receivedcash income during the year of $ 61.7 billion, for atotal of $ 70.9 billion.Collection from current income, domestic salesand exports mainly, was $ 60 billion, an increase of14% compared to 2011. Additional to the above, anaccount receivable from the Nation of $ 1.1 billionwas paid on account of subsidies on gasoline anddiesel generated in Q4 2011 and 2012.Figure 16.Investments (dollars)The variation in current income is mainly due to thegrowth of oil exports caused by price and volume,which went from 490 Kbcd to 516 Kbcd in 2012,representing a 5% increase.7.006.00Return USDBenchmark USDDomestic sales of gasoline, middle distillates,crude oil, gas and products accounted for 32% oftotal operating income.5.004.003.00Regular motor gasoline, and diesel, constituted73% of total domestic sales. The demand for theseproducts increased 2% due primarily to the growthof the country’s vehicle fleet.2.001.0001.89 1.840.921.671.451.02 1.340.48In total, 63 Kbd of gasoline and 92 Kbd of dieselwere sold (not including Reficar’s production).200920102011Source: Ecopetrol, Vice Presidency of Corporate Finance2012In terms of Capital Income, $ 1.5 billion wascollected primarily from revenues corresponding

124Employee services corresponding to payroll costs,benefits and parafiscals accounted for 8%, andoverhead 7% , with regard to total execution. Inother words, the execution of the company’s own,direct operating costs was $ 3.2 billion.As for resources executed for investment, $ 8.6billion, i.e. 74%, was allocated to the optimizationof production curves and the search for upstreamreserves; $ 2.8 billion, i.e. 23%, to the recoveryof availability factors and the improvement oftransportation systems in the downstream; theremaining 3% to the Cooperative; and $ 1.1 billionbetween contributions and loans to subsidiaries.The cash flow closed with a final balance of $ 10.7billion, of which $ 6.4 billion are accounts payablethat remained at the end of the budget year andpass to accrual and / or payment in the followingyear. Of this amount, $ 3.9 billion correspondsto dividends pending payment to the NationalGovernment and that will be paid in January2013. The remaining balance is mainly applied asworking capital for the start of the new year.to financial returns and dividends from companiesin which Ecopetrol has a shareholding.In expenditure, in terms of the execution ofcommitments including running, commercialoperations, debt and investment servicing, $67.5 billion was committed, equivalent to 92%of the total budget allocated for expenses andinvestments, and a total accrual level of 84%.Operating expenses showed an execution of $ 22.6billion, with a compliance level of 98% with regardto the budgeted amount.

Economic dimension125Share priceon the Colombian StockExchangeEcopetrol’s year-end share price was $ 5,460, with a30% increase in 2012. On May 3 it reached the year’smaximum price of $ 5,850.Despite the difficultglobal economicenvironment and theliquidation of one of thelargest Colombian stockbrokers in November, theshare price performedpositively and exceededthe benchmark ofthe Colombian StockExchange (IGBC), whichexperienced appreciationof 15.5% in 2012 (seeFigures 17 and 18).Col $Figure 17.Ecopetrol share price on the Colombian Stock Exchange$6.200$5.700$5.200$4.700$4.200$3.700$3.200Jan-12Jan 2/12Min.: $4,200Feb-12Mar-12Apr-12May 3/12Max.: $5,850May-12Jun-12Jul-12Aug-12Sep-12Oct-12Nov-12Dec 28/12Max.: $5,460Dec-12Source: Ecopetrol, Vice Presidency of Corporate FinanceFigure 18.Appreciation of Ecopetrol Shares vs. IGBC45%40%35%Ecopetrol30%30%25%20%15%10%5%IGBC15.5%0%Jan-12Feb-12Mar-12Abr-12May-12Jun-12Jul-12Aug-12Sep-12Oct-12Nov-12Dec-12Source: Ecopetrol, Vice Presidency of Corporate Finance

126ADR Price on the NewYork Stock ExchangeThe number of international institutionalinvestors with ADRs increased by 31%compared to 2011.Ecopetrol’s ADR year-endprice was US$ 59.67, rising32.7%. The highest priceduring the year wasUS$ 67.48 on May 1, 2012(see Figures 19 and 20).Figure 19.Ecopetrol ADR price on the NYSE$70$65$60May 1/12Max.: US$67.48Dec 31/12$59.67The number of outstandingADRs was 29 millionat year-end.US $$55$50$45$40$35Jan 3/12Min.: US$44.97Jan-12Feb-12Mar-12Apr-12May-12Jun-12Jul-12Aug-12Sep-12Oct-12Nov-12Dec-12Source: NYSEFigure 20.Appreciation of Ecopetrol ADR vs. S&P, Oil & Gas Index60%50%40%30%20%10%EcopetrolADR32.7%00%-10%-20%S&PO&G-2.8%Jan-12Feb-12Mar-12Apr-12May-12Jun-12Jul-12Aug-12sep-12oct-12nov-12dic-12Source: Ecopetrol, Vice Presidency of Corporate Finance

Economic dimension127Compliance with domestic andinternational regulationsIn 2012 Ecopetrol complied with all its obligations as an issuerof securities with the Colombian Stock Exchange (BVC), the NewYork Stock Exchange (NYSE) and the Toronto Stock Exchange(TSX).Obligations are classified into the categoriesfor the publication of relevant information, andcompliance with the Sarbanes-Oxley (SOX) Act.In relation to the first category, there were68 relevant information press releases in theFinancial Superintendence of Colombia, 36press releases and 27 documents under Form6-K required by the Securities and ExchangeCommission - SEC, in the United States,and 36 press releases on the Toronto StockExchange in Canada.All releases were reported in a timely mannerto the market and are available from thefollowing sources:Colombiaon the website of theFinancial Superintendenceof Colombia:www.superfinanciera.gov.co,Integrated Stock ExchangeInformation System(SIMEV, for its acronymin Spanish) andEcopetrol’s websitewww.ecopetrol.com.co.United Stateson the SEC’s website:www.sec.gov, section“search for CompanyFilings”, “Company orFund name”, “CompanyName”: ECOPETROL S.A.,“Ticker Symbol”: EC, “FindCompanies”Canadaon the TSX website(Toronto Stock Exchange):www.tmx.com, section“Get quote on TMXmoney.com”, through the “ECP”symbol, section “NewsHeadlines for Ecopetrol S.A.”In relation to compliance with the Sarbanes-Oxley(SOX) Act, Ecopetrol has a structured processthat enables management to provide its opinionon the effectiveness of financial disclosurecontrols and procedures, as well as on the internalcontrol of financial reporting, complying with therequirements of this Act.During 2012, the activities required for the issuanceof that opinion have been undertaken, which willbe submitted to the Securities and ExchangeCommission (SEC) no later than April 30, 2013.Evaluation of the performance ofdisclosure and control systems(Compliance with Law 964 / 2005)For the process of Disclosing Information tothe Stock Market, the effectiveness of controlsdefined for SOX was verified, and the initiativesto strengthen the Internal Control System werefulfilled.

128Taxes and transfersto the NationEcopetrol S.A. is currently one of the largest payers of national andterritorial taxes in Colombia. Its tax policy seeks to fulfill its statutoryobligations under existing regulations and obtain as many tax benefitsas possible for the company.The taxes payable by EcopetrolS.A. are summarized below:National Tax• Income andcomplementarytaxes• VAT under theregular tax system• Income and VATWithholding Agent• Domestic surchargeon Diesel• Flat-rate tax• Tax on EquityThe value paid by EcopetrolS.A. includes taxes borne by thecompany and tax withholdingsor collections made ​from thirdparties, which it then transfers tothe different tax authorities in itscapacity as a withholding agent.In 2012, total taxes andtransfers to the Nationamounted to $ 27.2 billion,which is 40.66% higher than2011 (see Tables 26 and 27 andFigure 21).Table 26.Taxes and transfers to the State (Figures in billions)Territorial Tax• Industry & Commerce,and Advertising Tax• Industry andCommerceWithholding Agent• Public lighting• Vehicles• Property• Surcharge on gasoline• Transport taxTaxes and transfersto the StatePurchases from ANH -Ecopetrol and thirdpartyroyaltiesDividends on previousyear profits2012 2011 2010 20098,564,053 8,048,981 5,335,946 4,358,4066,615,436 5,275,794 3,311,016 8,004,653Flat-rate Tax 1,450,559 1,379,701 1,241,653 1,123,679Income Tax andothers*10,044,653 3,650,373 1,178,446 4,393,924Tax on Equity 476,494 476,494 207,111 207,111Sales tax 127,998 561,498 490,452 573,130Total 27,279,193 19,392,841 11,764,624 18,660,905* The variation is due primarily to the income tax of $ 4.7 billion.Source: Ecopetrol, Vice Presidency of Corporate Finance

Economic dimension129Table 27.Taxes paid by Ecopetrol in 2012 (Figures in millions of pesos)Type of tax 2011 2012 Variation % NotesIncome Tax 3,155,803 7,913,516 4,757,714 151%Tax on Equity 476,494 476,494 0 0%Flat-rate Tax 1,379,701 1,450,559 70,859 5%Sales Tax 561,498 127,998 (433,500) -77%1234Industry andCommerce Tax155,599 171,479 15,880 10%5Figure 21.Comparative Summary ChartPayment of Taxes by Territorial Entity(Figures in millions of pesos)Territorial paymentsNational paymentsProperty Tax 7,606 10,879 3,273 43%Transportation Tax 7,414 14,880 7,466 101%Withholding at thesource for Income /VAT / Stamp TAxNational surchargeon diesel1,372,102 1,565,685 193,583 14%36,688 41,242 4,554 12%678912,000,000Withholding at thesource for Industryand Commerce Tax54,95 62,540 7,635 14%810,000,0008,000,000Surchargeon Gasoline105 3 (102) -98%96,000,000Vehicle Tax 446 361 (85) -19%104,000,0002,000,000Lighting Tax 5,876 13,591 7,715 131%110Total2011 and 20127,214,236 11,849,226 4,634,99020112012Source: Ecopetrol, Vice Presidency of Corporate FinanceSource: Ecopetrol, Vice Presidency of Corporate Finance

130Taxes to territorial entitiesIn 2012, Ecopetrol S.A. paid territorial entities [1] $ 171,479 million onaccount of Industry and Commerce Tax (ICA). Similarly, it paid $ 10,879million in property tax. The ongoing review of financial informationensures timely compliance with these obligations.1. Territorial authorities or entities arelegal entities governed under public law,which make up the political-administrativedivision of the Colombian state and areautonomous in managing their interests.Territorial entities are: departments,municipalities, districts, indigenousterritories and, potentially, regions andprovinces.Tax ReformLaw 1607 of December 26, 2012 reduced theincome tax rate to 25% and created a new taxcalled Income Tax for Equity (CREE, for its acronymin Spanish) whose rate is 8%. Also, it unified VATrates at 0%, 5% and 16%.In relation to diesel and gasoline, it eliminated Flatratetax and VAT and created a new national taxcalled the National Tax on Gasoline and diesel.ExplanatorynotesIncome tax levies allincome earned by ataxpayer in the year,which is likely to producean increase in net equityat the time of collection,provided it has not beenexpressly excluded, andconsidering the costsand expenses that areincurred to produce it.Tax on Equity is anational tax, calculatedbased on the equity valueof Ecopetrol on January1, 2011 and applies to theyears 2011, 2012, 2013and 2014.Flat-rate tax isadministered by theTreasury Department ofthe Ministry of Financeand originates from thesale or own-consumptionof Standard Gasoline,Premium Gasoline anddiesel, as well as otherfuels. Its variation is dueto the reference priceset by the Governmentand the volume of sales ​or own-consumption ineach period.Sales tax is a nationaltax and originates fromthe purchase and sale ofgoods and/or servicestaxed according toexisting standards. Thevalue paid correspondsto the net betweenthe VAT generatedin sales transactionsand the deducatableVAT originating in thepurchase of goods andservices.Industry and CommerceTax corresponds to aterritorial tax that leviesthe carrying out ofindustrial, commercialand service activitiesin each municipality.Ecopetrol S.A. paysindustry and commercetax in the municipalitieswhere it undertakes someof the above activities,provided that royalties arenot being paid in the caseof industrial activity.1 2 3 4 5

Economic dimension131Property tax levies landor real property located inurban, suburban or ruralareas, with or withoutbuildings, based on itsassessed value as aminimum. The amountpaid corresponds to asettlement proposed by atax authority.Transportation tax is paidon commercial oil andgas pipelines, with theperson liable being theowner of the oil and gas.The settlement of thistax is the responsibilityof the Ministry of Minesand Energy, and thecalculation thereofresults from applyingthe tax rate to the resultobtained from multiplyingthe transport rate bythe number of barrelstransported.The value reportedas withholding at thesource in respect ofincome, VAT, stamp andICA corresponds to thevalues ​deducted from ​Ecopetrol suppliers,which in turn weretransferred to each taxauthority in compliancewith the obligationsof the company as aWithholding Agent.This tax is generatedfrom the consumptionof standard or premiumgasoline, whetherdomestic or imported, inthe jurisdiction of eachmunicipality, district anddepartment. The valuepaid consists of thetax generated by ownconsumptionoperationsand amounts withheldfrom third parties.Vehicle tax levies theownership or possessionof non-excluded vehiclesand is paid based on thesettlement suggestedby the territorial entity,applying a previouslyestablished rate to thecommercial value thereof.Municipal-level territorialentities are authorizedto levy a tax on the“public lighting service”,organize its collectionand assign the mostsuitable allocation theretoin order to addressmunicipal services. Withinthe general frameworkestablished by law,municipal councils canfreely and autonomouslyset this, in accordancewith the constitutionalframework.6 7 8 9 10 11

132Labor costsThe wage increase for Ecopetrol employeesthat became effective from July 2012 was4.35%, corresponding to the CPI in June, plus anadditional 1.15%.Table 28.Active employee labor costsFrom that date, the other items and benefits agreedupon in the Collective Labor Agreement wereadjusted to the CPI and the terms of the collectiveagreement provisions in force.During the year, the merit-based compensationsystem was applied, supported by an individualperformance classification model.The variation in labor costs between 2011 and 2012,was 16% (see Table 28).Labor costs Dec 2011 Dec 2012 VariationWages and salaries 463,838 548,951 18%Social benefits 186,357 226,856 22%Benefits 249,302 269,900 8%Health 136,668 152,186 11%Education 64,759 74,050 14%Non-fiscal Contributions 110,237 128,262 16%Others 42,879 49,984 17%Total 1,254,039 1,450,190 16%Pension costsCosts for retired personnel reflect an increase comparedto 2011, brought about by a change in the assumptionsfor the update of pension reserves both for health andeducation.Source: Ecopetrol, Vice Presidency of Corporate FinanceMedical services saw an increase of 5.5% for the firstyear, then decreasing linearly until, for the fifth yearonwards, reaching a value equal to inflation plus 1.5%.Regarding education aid, an annual increase equalto inflation plus 1.5% was considered, which in 2012amounts to 4.75%.In 2012 only health and education actuarial amortizationwas recognized (see Table 29).The pension obligation, as a result of the commutationprocess that took place on December 31, 2008, iscontrolled through memorandum accounts.Table 29.Ecopetrol Pension CostsPension costs Dec 2011 Dec 2012 VariationRetiree Actuarial Amortization 443,890 688,693 55%Retiree Health 205,929 204,269 -1%Retiree Education 56,480 55,493 -2%Total 706,298 948,455 34%Source: Ecopetrol, Vice Presidency of Corporate Finance

Economic dimension 133Risk managementSince 2003, Ecopetrol has had an ERM (Enterprise Risk Management)system, which is framed within the Internal Control System, isaligned with the organization’s strategic framework (updated to2020) and is regularly monitored by senior management.Additionally, the ERMsystem has been designedconsidering the needs of thecompany, establishing as afocus of implementation theidentification, assessment,management and monitoring ofthe main events (risks) that mayaffect the achievement of thecompany’s strategic objectives.Each of the risks identified hasan analysis of associated causesand consequences, is assessedwithin five different dimensions(People, Economic, Environment,Ecopetrolrisk map2012 MapNewBusiness andInvestmentsFINANCIALReputation and Customers) andhence are classified as Very High,High, Medium, Low or Null risk.For risks assessed as Very High,High and Medium, managementplans are defined aimed atreducing the occurrenceprobability or impact level forEcopetrol.Currently, all information relatedto the company’s strategic risksis contained in the official tool forrisk management and controls,BWise, implemented since 2011.10PublicOrderPartners59Human1LaboralTalent2 Reserves Problem43CompetitiveAdvantage14Macroeconomic12 ProjectsVariablesSTRATEGIC13FinancialResources7Politicaland RegulatoryL. Ambiental 8y Cambio Climático11IncidentsENVIRONMENT6SocialEnvironmentOPERATIONALSTRATEGIC• (1) Failure to secure theincorporation of newreserves within the timeand volumes required.• (2) Not having competenthuman talent available.• (3) Failure to incorporatea competitive advantagein heavy and extra heavycrude oil for Ecopetrol.• (4) Carrying out businessand investments thatdo not meet the valuepromise of the corporategroup.• (5) Inadequate relationswith partners.ENVIRONMENT• (6) Impact on operationsfrom changes in the socialenvironment.• (7) Impact on investmentsfrom changes in the politicalenvironment.• (8) Impact on operationsand projects due toenvironmental licensing andclimate change.• (9) Labor problemsthat affect Ecopetrol’soperations.• (10) Public order problems.OPERATIONAL• (11) Incidents that affectpeople, the environment andinfrastructure.• (12) Inadequate projectmanagement.FINANCIAL• (13) Not having thenecessary resources toexecute the investment plan.• (14) Changes inmacroeconomic variablesand prices that affect theliquidity position.

134Legal affairsIn 2012 Ecopetrol’s Legal Vice Presidency focused on legalsupport for the Dosquebradas Project, Ronda Colombia 2012,general legal advice for the undertaking of the company’scorporate purpose and the addressing of litigation issues.

Economic dimension135Results in litigationThe 2012 period began with a total of 2,418 activelawsuits, of which claims of $420,845,093,191 wereresolved in a definitive manner 2 equivalent to US$238,003,5933 3 .In the case of legal proceedings against Ecopetrol,claims in the order of $410,396,079,625were ruled on (US$ 232,094,286), of which$284,459,296,911 (US$ 160,872,339) were ruledin favor of the company.It is important to highlight that in the contractualprocess of Latinamerican Hydrocarbon CorporationS.A. against Ecopetrol regarding condensate supplyin Apiay, the Cundinamarca Administrative Courtrevoked the order that granted the appeal againstthe first instance judgment, due to having beensubstantiated extemporaneously. Consequently,the first instance judgment remains firm, whichdenied the claims of the lawsuit whose amounttotaled $162,100,000,000 (US$ 91,673,595).With regard to cases in which Ecopetrol was theplaintiff, without including criminal proceedings,claims for a total of $8,475,458.521 (US$4,793,187) were ruled on, and settlements in favorof the Company amounted to $4,683,536,794(US$2,648,714).Resultsin legal adviceThe task of advising the company’s variousdepartments was performed under criteria oftimeliness and quality in 2012.Within the upstream environment, there wasactive participation in the ANH’s Ronda Colombia2012 process, where 12 blocks were acquired.Also, legal support was given in bringing Anadarkoonboard as an Ecopetrol strategic partner (FuerteNorth and South, Purple Angel), with whichincreased value to existing blocks was achieved(Fuerte North and South).In the area of downstream legal advice, activesupport was provided for the Firm Capacity Round2012, the development and signing of the contractwith the India Essar company to sell 12 millionbarrels of oil during one year, the signing of firm gascontracts for 2012-2013 and the legal structuringnecessary for the Barrancabermeja RefineryModernization Project, among others.Regarding Ecopetrol’s shareholders, the fullprotection of dividends was achieved for shareholdersassociated with Proyectar Valores S.A. (broker inliquidation) and a protocol was developed in the eventof other brokerage firms entering liquidation.2. This involves court proceedings in respect of which there isno appeal.3. For the purposes of presenting the information in dollars, theofficial rate at December 31, 2011 was used in this document, whichcorresponds to $1,768.23 per dollar.With regard to social and environmental issues,there was a joint development of corporateprocedures and / or guidelines aimed at theenvironmental compliance of operations, takinginto account recent regulatory updates forapplications for the certification of the presence ofethnic communities with Incoder and the Ministryof the Interior, among others.

136Main contingenciesOf the 659 processes that have an accountingprovision for 2012, 85.4% of provisionedvalues ​are concentrated in the followingthree processes:The company’s legal defense strategy in relation tothe environmental authorities was structured as aresult of incidents in Dosquebradas and Cúcuta, aswell as for the the sanction process opened by theNational Environmental Licensing Authority in theRancho Hermoso field, achieving in the latter case,the closing of the administrative investigation bythis Authority without sanction.There was participation in the negotiation ofthe Free Trade Agreement with the UnitedStates, achieving Ecopetrol’s exclusion from thegovernment procurement chapter.Compliance withdomestic andinternationalregulationsThe Investor Relations Department of the VicePresidency of Corporate Finance did not report anybreaches and clarified that Ecopetrol is no longerpart of the Lima Stock Exchange.Legal restrictionsto operateGiven the legal nature and corporate purpose ofEcopetrol S.A., there are no legal restrictions tooperate other than those that, by virtue of theConstitution and the Colombian legal system, applyto any other company in the hydrocarbon industry.Class action by Luis Enrique Olivera Petro againstEcopetrol (ACON02634), the Nation, Ministry ofMines and others, due to the extension CusianaPartnership Contract.The claims amount to $155,183,611,517 (US$87,762,119.9). The case is currently in the process ofappeal through the Council of State against the rulingin the first instance, which declared the invalidity ofthe Amendment to the Garcero extension contract.Class Action filed by Jairo Baron Caballero againstEcopetrol, BP and others, for the alleged failure tomake the solidarity payment for the generation ofenergy on the part of BP, as an operator, for its ownuse in the Cusiana and Cupiagua CPFs and paymentof the transfers from the electricity sector regulatedby Law 99 of 1993.The amount totals $220,043,836,100(US$124,442,994).Class Action filed by Álvaro Vivas againstOccidental de Colombia (a company thattogether with Ecopetrol, forms part of the CravoNorte partnership contract) due to the failure tomake the solidarity payment discussed in Section4, Article 89, Law 142 of 1994.The claims amount to $283,010,088,725(US$160,052,758).The ruling in the second instance from theAdministrative Court of Arauca, which wasunfavorable, will be reviewed by the Councilof State.

Economic dimension137Monopolistic and anti-competitivepractices, and their resultsIn 2012, there were no actions or rulings against Ecopetrol S.A.involving practices against free and fair competition or restrictivebusiness practices.Claims regarding health,safety and customerprivacyThere were no incidents of non-compliance withlegal regulations and voluntary codes related tothe impact of products and services on healthand safety during their life cycle.Similarly, there were no duly substantiated claimsregarding breaches of privacy and losses ofcustomer’s personal data.Sanctions and finesAccording to that reported by the competentagencies, significant fines and non-monetarysanctions imposed on Ecopetrol in 2012 originatefrom environmental regulations.Environmental authorities confirmed andimposed ten monetary sanctions on Ecopetrolwhose amount varies from eleven to sixty millionpesos, some of them as a result of the oil spillcaused by terrorist attacks on the Caño Limón-Coveñas pipelines, against which the Companyfiled the relevant legal appeals.On the balance sheet, only one of the sanctionsis significant and it corresponds to that imposedby the Regional Autonomous Corporationfor the Macarena Special Management Area,which through Resolution PS.GJ.1.2.6.12 0026of January 27, 2012, ruled on the motion forreconsideration filed by Ecopetrol S.A., againstthe fine imposed by resolution PS-GJ.1.2.6.111849 of November 21, 2011, ruling to amendthe contested resolution and adjusted thevalue of the sanction from $5,125,078,112(US$ 2,898,422.77) to $ 3,427,283,168 (US$1,938,256.43).According to reports from the relevant areas,for 2012 only one non-monetary sanction wasimposed originating from environmental issues,which consisted of the following:Through Resolution 0935 of 1 June 2012, theRegional Autonomous Corporation, in relationto the Macarena Special Management Area,ruled on the motion for reconsideration filedagainst resolution 270 of February 13, 2012,through which Ecopetrol was sanctioned with therestoration of 15,005 forest seedlings along withtheir respective maintenance for one year, as wellas the maintenance of those already establishedfor one year or more, or the period determined bythe CAM technician.According to that reported by the competentdepartments, in 2012 there were no fines or nonmonetarysanctions for noncompliance with lawsand regulations concerning the provision, useand labeling of the organization’s products andservices.Compliancewith full disclosureobligationsAccording to the information provided by theInvestor Relations Department of the VicePresidency of Corporate Finance, the obligationsto reveal relevant information as a securitiesissuer on the Colombian, New York and TorontoStock Exchanges, were fulfilled in 2012.

138Corporate groupSpecial reportIn addition to the information provided in this chapter andthe attached financial statements, the following specialreport has been provided on the existing economic relationsin 2012 between Ecopetrol S.A., its affiliates, subsidiaries andassociated companies. This is done in compliance with Article29, Law 222 of 1995.

Economic dimension139In 2012, Ecopetrol progressed in its strategy toconsolidate the corporate group through thestrengthening of its operations, the focusing ofbusiness and the increased efficiency of financialresources.Companies that are part of the exploration andproduction segment obtained a production of51.9 kboed equivalent and drilled 20 exploratorywells, with 16 completed, six of which reportedthe presence of hydrocarbons, representing asuccess rate of 37.5%.The company also made progress in thespecialization of the transport business withthe creation of Cenit Transporte y Logística deHidrocarburos S.A.S., a company 100% ownedby Ecopetrol, specializing in the transportationof hydrocarbons, whose focus will be on meetingthe transport needs of the country’s producers.Furthermore and in order to develop thetransport infrastructure needed to support theincrease in the level of production and ensurethe export of crude produced in the country,construction of the Bicentenario Pipelinecontinued, and the maintenance and integrity ofthe pipeline network intensified.In the downstream segment, the expansionand modernization project for Refinería deCartagena S.A. (Cartagena Refinery) - REFICARmade progress, which aims to increase theplant’s capacity to 165 kbod, while Propilco madeprogress in its strategy of pursuing new marketsand ensuring improved margins.In Biofuels, Bioenergy continued undertakingthe project for the construction of a plant forthe production of ethanol from sugarcane,with a capacity 480,000 liters per day, in thedepartment of Meta. Ecodiesel Colombia S.A., inturn, increased the production of biodiesel.Ecopetrol currently has 25 subsidiary companiesand has shareholding in another 7 companies.Below is a brief summary of the main resultsof some of the subsidiary companies ofEcopetrol S.A.TransportBiofuelsExplorationand productionRefiningFinancial

140Exploration and ProductionHocol S.AHocol is an oil exploration andproduction company, 100%owned by Ecopetrol S.A., whichis present in fields in the Upperand Lower Magdalena Valleyand the Llanos Orientales inColombia.It has a diversified explorationportfolio in heavy oil and gas.The most significant contractsfor its prospectivity are foundin Block CPO17 (heavy oil) in theLlanos Orientales, and Bongaand Samán (gas) in the LowerMagdalena Valley.Production in 2012, includingroyalties, was 24.9 (kboed) fromthe Ocelote and La Hocha fieldslocated in the department ofMeta and the Upper MagdalenaValley, respectively.In May 2012, the PalermoPartnership Contract reverted toEcopetrol and during the year,four of the seven prospectsdrilled and completed reportedthe presence of hydrocarbons,as is the case of the Mamey wellin the Samán Block, the Dorcaswell in Block CPO17, well Pintado1 in the Guarrojo Block and wellMerlín 6 in CPO17.Equion Energía LimitedEquion is an oil exploration andproduction company in whichEcopetrol has a 51% stake.Its investments have focusedprimarily on the developmentof the reserves of currentPiedemonte contracts andoffshore positioning on theAtlantic coast.The company has fourpartnership contracts inplace with a productionbefore deducting royalties, ofapproximately 35 kboed. Most ofthe production comes from thePiedemonte contracts that arecharacterized by the generationof crude, gas and condensate.In 2012 three developmentwells and one exploratorywell were drilled in ColombianCaribbean waters, whichreported the presence of drynatural gas. Additionally, asa result of the reorganizationof its shareholders, Equionassigned its direct participationin Ocensa to its shareholders(Ecopetrol and Talisman)and signed a transportationagreement to evacuate theexpected volumes in itsbusiness plan.Ecopetrol Oleoe Gas Do Brasil Ltda.It is a subsidiary 100% ownedby Ecopetrol S.A., throughits affiliate Ecopetrol GlobalEnergy, which was establishedin December 2006 in order tostart the internationalizationstrategy. Currently, it hasinterests in eleven offshoreexploration blocks in the Para-Maranhao, Campos and Santosbasins in Brazil.In 2012 it drilled fourexploratory wells of whichthree reported unsuccessfulresults, and the remaining oneis under evaluation.

Economic dimension141Ecopetrol del Perú S.A.It was founded in 2007 toadvance the internationalizationstrategy. It is a subsidiary 100%owned by Ecopetrol S.A., throughits subsidiary Ecopetrol GlobalEnergy.It currently has blocks in theMarañon basin of which the 180,the 182 and the 184 are pendingsigning of the Supreme Decree.Also pending is approval fromlocal authorities of the FarmoutAgreement on block 109 signedwith Repsol in January 2012.Blocks 101, 134, 117, 90, 158and 179 are in the process ofreturning to PeruPetro.Ecopetrol America Inc.In 2007 this company wasestablished with the objectiveof having a presence inthe Gulf of Mexico in theUnited States, one of themost prospective areas inthe world, to develop a longterm strategy that makes itpossible to increase reservesand expand the investmentsportfolio. Ecopetrol S.A.indirectly holds 100% throughEcopetrol Global Energy.Its presence covers a totalarea of 1,131 km2 and it has astake in 130 blocks. Its currentstrategy is focused on thedevelopment of exploratorypotential and participation indiscovered fields.Offshore InternationalGroup Inc.Offshore International Groupis the Holding company for theshares of companies domiciledin Peru, in which Ecopetrol hasa 50% stake. Its main assetis Savia Peru, a companyengaged in the exploration,development, production andprocessing of hydrocarbons onthe Peruvian coast.Currently it has eleven blocks(one in production and ten inexploration), which representsone of the largest offshoreareas in South America (8.6million hectares). Block Z2B,located in the north, in theTalara area, is the only asset inproduction with 14 kboed netbefore royalties.It has a producing asset with ashare of 9.21% in K2, with netaverage volumes in 2012 of 1.6kboepd.In 2012 three exploratorywells were drilled, of whichtwo showed the presenceof hydrocarbons; Parmer,operated by Apache with a 30%stake and Dalmatian operatedby Murphy with a 30% stake.In 2012, twenty developmentwells were drilled in block Z2Band two exploratory wells in theformations of Santa Catalinaand Colán, with potentialestimated resources of 12mmboe.

142TransportCenit, Transportey Logística deHidrocarburos S.A.S.Oleoducto de los LlanosS.A. – ODLOleoducto Central S.A. -OCENSAIn June 2012 Cenit wasincorporated, a company100% owned by Ecopetrol S.A.,specializing in transportationand logistics for hydrocarbons,which will meet the needs ofthis segment of the oil industryin Colombia.The new company ownsinterests in companiesspecializing in thetransportation of hydrocarbonssuch as Ocensa with 35.29%,Bicentenario with 54.8%, ODLwith 65%, ODC with 43.85% andServiport with 49%.Oleoducto de los LlanosOrientales - ODL, in whichEcopetrol S,A, has a 65% stakethrough Cenit S.A.S. startedoperation in September 2009and currently has a length of ​262 kilometers of pipeline,which enables the transport ofcrude oil from the Rubiales fieldto the Monterrey and Cusianastations in Casanare, where itcan be carried to the export portand refinery.During the course of 2012, ittransported 217 KBOD of crudefrom the Rubiales field.Oleoducto Central S.A. -OCENSA, is a system consistingof seven stations and an830 kilometer pipeline,which connects the Cusianaand Cupiagua fields in thePiedemonte Llanero with theCoveñas marine terminal.At December 31, 2012,Ecopetrol S.A. has a 72.6%indirect interest in Ocensa.It holds 35.3% through Cenitand 37.4% through EcopetrolPipelines International Ltd.- EPI.Ocensa increased its volumetransported by 4.4%, from563 kboed in 2011 to 591kboed in 2012.

Economic dimension143Oleoducto de ColombiaS.A. – ODCOleoducto Bicentenariode Colombia S.A.S.Oleoducto de Colombia - ODC,commenced operations onJuly 4, 1992 and since thenhas provided services for thereceipt, storage, transportation,transfer and shipment of oilfrom Magdalena Medio toCoveñas on the border of thedepartments of Sucre andCórdoba. The system consists of481 kilometers of pipeline thatconnects Vasconia Station inPuerto Boyacá with the CoveñasMarine Terminal.In August 2010 the companyOleoducto Bicentenariode Colombia S.A.S. wasincorporated with the aimof building a transportationinfrastructure that enablesthe transportation of crudefrom the Llanos Orientalesbasins, from Casanare toCoveñas. Ecopetrol has a 56%indirect stake in the Companyas follows: 54.8% throughCenit, 0.97% through Hocol,and 0.20% through EcopetrolPipelines International Ltd.Ecopetrol has a 73% stake inODC, 21.7% through Hocol, 7.4%through Equion and 43.85%through Cenit.In 2012, the project began thatwill expand its capacity to 236kboed. It currently transports203 kboed.During 2012, constructioncontinued of the Banadíaunloader and the oilstorage facilities, as well asconstruction of the 230 kmlong and 42” diameter pipelinebetween the Banadía andAraguaney station, with acapacity of 600 kboed.In 2012 a syndicated bankloan under a project financestructure, was signed withlocal banks, for a total amountof $ 2.1 billion, equivalent toUS$ 1,167 million.

144RefiningBiofuelsRefinería de CartagenaS.A – REFICARPolipropileno del CaribeS.A – PROPILCOBioenergy S.AReficar moved forward in theCartagena Refinery Master Plan,a strategic project that aims toexpand the refinery’s capacityto 165 kbod under the highestinternational standards.At the close of the year, theproject achieved physicalprogress of 74.3%. The currentrefinery continued supplyingproducts to the north of thecountry, as well as internationalmarkets with sales of 35.9million barrels of refinedproducts and bottom residue.This company that belongsto the petrochemical sector,became part of the EcopetrolCorporate Group in 2008,with Ecopetrol having a directinterest of 49.9% and a 50.1%indirect interest. Located in thecity of Cartagena, Propilco is thepolypropylene market’s leadingproducer in Colombia.Dedicated to the productionand sale of different varietiesof polypropylene, it has aproduction capacity of 500,000tons / year.In 2012 the company achievedthe opening of new marketsabroad and consolidated itselfas a national leader in theproduction and sale of resin.Its sales totaled 430,000 tons,of which 240,000 tons wereexported and the remaining189,000 were sold in thedomestic market.The company is a subsidiaryacquired by Ecopetrol in 2008,through its affiliate AndeanChemicals Limited, which owns91.43% of the shares.The objective of BioenergyS.A. is to build an industrialplant for the production ofethanol from sugar cane, witha capacity of 480,000 liters perday. The operation of the plantwill require the planting andcultivation of 14,400 hectaresof sugarcane for its supply anda total investment of US$ 344million is estimated.At the close of year, the projectattained progress of 59.33%.10,196 hectares of land havebeen acquired, of which 6,237hectares has been plantedwith sugar cane, 3,303 hectaresin 2012.

Economic dimension145FinancialEcodiesel Colombia S.A.Black Gold ReEcopetrol Capital AGA company created in 2007in which Ecopetrol has a 50%shareholding. It has a biodieselproduction plant in the cityof Barrancabermeja with atheoretical capacity of 100,000tons per year.In 2012 it reached a sales totalof 111,765 tons of biodiesel, ofwhich it delivered 80,162 to theBarrancabermeja Refinery forits 2% blending process withregular diesel, and 31,603 tonsto wholesalers, which positionsit as a major player in its areaof ​influence and within thecountry’s biodiesel industry.Captive reinsurance companyformed for the purposeof managing all businessassociated, in whole or inpart, directly or indirectly,with the signing of insuranceand reinsurance for therisks of Ecopetrol S.A. and itssubsidiary companies.Among the main risks thatthe captive addresses areMaterial Damage, Sabotageand Terrorism, Transportation,Well Control, Infidelityand Financial Risks, andPerformance Bonds (Policies)that Ecopetrol S.A. mustsubmit to third parties,whether public or private.Established in late 2011,Ecopetrol Capital AG is thecaptive financial vehicle of theCorporate Group. Domiciled inSwitzerland and with a directholding from Ecopetrol S.A. of100%, it has been operating toprovide liquidity to CorporateGroup companies with financialdeficits, with funds fromcompanies with surpluses.Currently it has transactionsof US$ 720 million with relatedparties to finance part of theCorporate Group’s projects.During 2012, it continuedto assure the insurancestrategy for Ecopetrol S.A. andits companies, through theoptimization of the terms andconditions of coverage and therate for the various insurancesigned within its mainUmbrella Matrix (PMS) andGlobal Energy (GEP) programs,reaching a written premiumlevel of US$ 41.3 million, i.e.11% more compared to 2011.

146Relevant transactionsof the companies in the Corporate GroupTo complement the information presented in this chapter and the annexes to thefinancial statements, the following special report is disclosed on the economicrelationships in 2012 between Ecopetrol, its affiliates, subsidiaries and relatedcompanies. The above, in order to comply with Article 29, Law 222 of 1995.During 2012 the following significant transactions were made betweencompanies in the Corporate Group:Significant transactions between companiesSource company Destination company ItemValue inthousandsValue inmillionECOPETROL BIOENERGY SERVICES 498,947,525 499ECOPETROL ECOPETROL OLEO GAS DO BRASIL SERVICES 201,946.,469 202ECOPETROL ECOPETROL CAPITAL AG SERVICES 517,060,384 517ECOPETROL COMAL PRODUCT SALES - PROPYLENE 125,887,615,232 125,868ECOPETROL EQUION SERVICES 23,876,913,346 23,877ECOPETROL EQUION PRODUCTS SALES - NATURAL GAS 1,497,567,193 1,498ECOPETROL HOCOL SERVICES 20,787,887,507 20,788ECOPETROL HOCOL PRODUCTS SALES - NATURAL GAS 727,259,294 727ECOPETROL OLEODUCTO BICENTENARIO SERVICES 13,512,692,598 1.353ECOPETROL OLEODUCTO CENTRAL SERVICES 27,775,591,427 27,776ECOPETROL OLEODUCTO CENTRAL PRODUCTS SALES - NATURAL GAS 2,025,239,601 2,025ECOPETROL OLEODUCTO DE COLOMBIA SERVICES 8,979,967,209 8,980ECOPETROL OLEODUCTO DE LOS LLANOS PRODUCT SALES - CRUDE 19,872,050,565 19,872ECOPETROL OLEODUCTO DE LOS LLANOS SERVICES 11,581,054,995 11,581ECOPETROL ECOPETROL PERÚ SERVICES 1,151,106,030 1,151ECOPETROL REFINERIA DE CARTAGENA PRODUCT SALES - CRUDE 5.129.137.860.902 5,129,136ECOPETROL REFINERIA DE CARTAGENA SERVICES 112,066,943,265 112,067ECOPETROL REFINERIA DE CARTAGENA PRODUCTS SALES - NATURAL GAS 42,599,365,136 42,599ECOPETROL REFINERIA DE CARTAGENA PRODUCT SALES - PROPANE AND LPG 6,893,489,831 6,893ECOPETROL ECOPETROL CAPITAL AG INTEREST 2,952,752,115 2,953ECOPETROL REFINERIA DE CARTAGENA INTEREST 55,969,596,778 55,970ECOPETROL REFINERIA DE CARTAGENA SALE OF MATERIALS 12,908,436 13ECOPETROL OLEODUCTO DE LOS LLANOS OTHER MINOR INCOME 73,644,163 74COMAI PROPILCO PRODUCT SALES - PLASTIC AND RUBBER 48,149,342,210 48,149COMAI PROPILCO PRODUCT SALES - PROPYLENE 251,245,418,212 251,245COMAI ECOPETROL S.A. COMPENSATION 5,389,604,798 5,390COMAI PROPILCO OTHER MINOR INCOME 80,287,100 80ECOPETROL CAPITAL AG ECOPETROL OLEO GAS DO BRASIL INTEREST ON LOANS 6,204,130,397 6,204ECOPETROL CAPITAL AG OLEODUCTO BICENTENARIO INTEREST ON LOANS 21,341,255,645 21,341ECOPETROL CAPITAL AG REFINERIA DE CARTAGENA INTEREST ON LOANS 42,578,041,911 42,578EQUION ECOPETROL S.A. PRODUCTS SALES - NATURAL GAS 577,805,361 5,776EQUION ECOPETROL S.A. PRODUCT SALES - PROPANE AND LPG 19,408,601,376 19,409

Economic dimension147EQUION HOCOL PRODUCTS SALES - NATURAL GAS 831,623,078 832EQUION REFINERIA DE CARTAGENA PRODUCT SALES - CRUDE 101,776,302,262 101,776EQUION ECOPETROL CAPITAL AG INTEREST ON LOANS 1,376,735,752 1,377EQUION OLEODUCTO CENTRAL OTHER MINOR INCOME 147,876,838 148EQUION OLEODUCTO CENTRAL COST RECOVERY 28,133,343,370 28,133EQUION ECOPETROL S.A. OTHER SERVICES 4,593,333,344 4,593EQUION ECOPETROL S.A. SALE OF MATERIALS 326,467,649 326EQUION ECOPETROL S.A. OTHER MINOR INCOME 6,307,471,743 6,307HOCOL ECOPETROL S.A. PRODUCTS SALES - NATURAL GAS 363,263,802 363HOCOL ECOPETROL CAPITAL AG INTEREST ON LOANS 488,349,051 488HOCOL OLEODUCTO BICENTENARIO INTEREST ON LOANS 316,673,212 317HOCOL ECOPETROL S.A. OTHER SERVICES 56,956,793,396 56,957OLEODUCTO BICENTENARIO ECOPETROL S.A. OTHER SERVICES 191,968,403 192OLEODUCTO CENTRAL ECOPETROL S.A. SERVICES 522,074,013,018 522,074OLEODUCTO CENTRAL HOCOL SERVICES 33,222,512,501 33,223OLEODUCTO CENTRAL ECOPETROL S.A. OTHER SERVICES 349,261,134 349OLEODUCTO CENTRAL OLEODUCTO DE LOS LLANOS OTHER SERVICES 17,357,796 17OLEODUCTO CENTRAL OLEODUCTO BICENTENARIO OTHER SERVICES 551,493,585 651OLEODUCTO CENTRAL OLEODUCTO DE COLOMBIA OTHER SERVICES 5,054,988,945 5,055OLEODUCTO DE COLOMBIA ECOPETROL S.A. SERVICES 71,668,657,966 71,669OLEODUCTO DE COLOMBIA EQUION SERVICES 12,722,037,989 12,722OLEODUCTO DE COLOMBIA HOCOL SERVICES 29,655,557,807 29,656OLEODUCTO DE COLOMBIA OLEODUCTO CENTRAL SERVICES 2,840,334,992 2,840OLEODUCTO DE LOS LLANOS ECOPETROL S.A. SERVICES 275,198,020,711 275,198OLEODUCTO DE LOS LLANOS OLEODUCTO BICENTENARIO OTHER SERVICES 409,866,957 410OLEODUCTO DE LOS LLANOS ECOPETROL S.A. TRANSPORT SERVICES 109,217,077,509 109,217PROPILCO COMAI PRODUCT SALES - PLASTIC AND RUBBER 22,497,893,742 22,498PROPILCO COMAI OTHER MINOR INCOME 17,677,426,298 17,677REFINERIA DE CARTAGENA ECOPETROL S.A. PRODUCT SALES - MIDDLE DISTILLATES 226,406,575,242 226,407REFINERIA DE CARTAGENA ECOPETROL S.A. PRODUCT SALES - GASOLINE 358,750,661,448 358,751REFINERIA DE CARTAGENA ECOPETROL S.A. PRODUCT SALES - PROPANE AND LPG 1,200,144,596 1,200REFINERIA DE CARTAGENA ECOPETROL S.A. OTHER INCOME 806,292,054 806REFINERIA DE CARTAGENA COMAI PRODUCT SALES - PROPYLENE 58,948,208,755 58,948

148To comply with the provisions of Circular 002 of1998, the employees hired directly by EcopetrolS.A. subsidiaries during the year are listed:Employees directly employed by subsidiariesManagement employees,and those maintainingconfidentialityOthersTotalSubsidiaryNo. ofEmployeesPersonnelCostsNo. ofEmployeesPersonnelCostsNo. ofEmployeesPersonnelCostsEcopetrol America Inc. NA NA NA NA 28 USD 6,435,719Ecopetrol del Perú S.A. 12 USD 1,705,491 0 0 12 USD 1,705,491Ecopetrol Oleo e Gas doBrasil Ltda14 USD 2,004,620 0 0 14 USD 2,004,620Hocol S.A. 194 $65,484,167,382 0 0 194 $65,484,167,382Equion 489 $83,241,100,848 0 0 489 $83,241,100,848Ocensa 191 $30,107,362,085 0 0 191 $30,107,362,085ODC S.A. 1 $680,004,348 0 0 1 $680,004,348ODL 16 $5,967,374,179 3 $14,611,466 19 $5,981,985,645Oleoducto Bicentenariode ColombiaRefinería de CartagenaS.A.25 $6,745,616,323 2 $78,901,712 27 $6,824,518,035106 $20,037,824,932 50 $2,099,222,118 156 $22,137,047,050Propilco S.A. 214 $19,456,804,362 102 $6,596,541,635 316 $26,053,345,997Bioenergy S.A. 15 $ 2,969,606,210 128 $ 3,853,617,639 143 $6,823,223,849Bioenergy Zona FrancaS.A.S10 $ 2,113,488,017 25 $ 1,458,716,347 35 $3,572,204,364Black Gold Re Ltd. 0 0 0 0 0 0Ecopetrol Capital AG 0 0 0 0 0 0Ecopetrol Global EnergyS.L.1 24,487 € 0 0 1 24,487 €CENIT 20 USD 332.035,85 0 0 20 USD 332.035,85Source: Ecopetrol S.A.

Economic dimension149Judicial proceeding provisionsNumber ofproceedingsValue ofProvisionsInitial balance December 2011 784 688,191Additions (new provisions) 313 412,176Adjustments to existing provisions (410) (310,150)Recovery from forwarding of proceedings (5) (6,526)Final balance December 2012 682 783,691Ecopetrol Hocol Equion OcensaCases Value Cases Value Cases Value Cases Value771 682,158 10 5,640 3 393309 402,044 1 2,089 2 1 1 8,042(405) (307,789) (6) (2,420) 1 59(2) (5,491) (2) (680) (1) (355)673 770,922 3 4,629 5 98 1 8,042

150ContingenciesThe following summarizes the most significant processes with claimsover $ 10,000 million on which provisions have been recognized, inaccordance with the assessments of the company’s internal andexternal attorneys, at December:ProcessActionProvision AmountDecember 2012Provision AmountDecember 2011GarceroPartnershipContractClass action against Ecopetrol S.A.,the Nation, Ministry of Mines andothers, due to the extension of theGarcero Partnership Contract.155,184 204,189Municipalitiesof Aguazul andTauramenaClass Action. Contributions tothe solidarity fund and incomeredistribution as a result of powergeneration, according to Law 142of 1994.220,044 139,688Municipalityof AraucaClass Action. Contributions tothe solidarity fund and incomeredistribution as a result of powergeneration, according to Law 142of 1994.283,010 121,051Departmentof Tolima (*)Class action for the reassessmentof royalties with the 20% stipulatedby Law 141 of 1994.- 82,287Lawsuit.Salary Effect -savings incentiveApply salary effect to monies paidunder the savings incentive modeland consequently reassess socialbenefits (legal and extralegal)and monthly pension from thedate that Ecopetrol S.A. began torecognize it.18,689 79,504

Economic dimension151Note: the report by segment is calculated based on transfer pricesbetween business units, with reference to export parity prices. Due to achange in methodology in the transport segment, a reclassification wasperformed for comparative purposes with regard to the figures for 2011,taking into account that the transportation services provided by thirdparties are allocated directly to the corresponding segment, withoutbeing regarded as income for the transport segment. Some other figuresfor 2011 were also reclassified for presentation purposes.Segment resultsResults by segment (billion COL$)E&P Refining Transport Supply and MarketingBillion COL$ Q4 12 Q4 11 Q4 12 Q4 11 Q4 12 Q4 11 Q4 12 Q4 11Local Sales 3,818.5 4,038.8 4,220.2 4,526.0 631.8 693.7 264.6 301.2Exports 6,059.7 6,516.8 818.8 844.2 0.0 0.0 3,024.3 3,436.1Total Sales 9,878.2 10,555.6 5,038.9 5,370.3 631.8 693.7 3,288.9 3,737.3Operating Income 5,570.5 7,036.5 (336.1) (243.5) (275.0) 112.3 78.4 140.1Operating Margin 56.4% 66.7% ( 6.7%) ( 4.5%) ( 43.5%) 16.2% 2.4% 3.7%Net Income 4,215.0 4,812.5 (315.2) (392.2) (246.4) (54.0) 53.5 66.3Net Margin 42.7% 45.6% ( 6.3%) ( 7.3%) ( 39.0%) ( 7.8%) 1.6% 1.8%EBITDA 6,358.8 7,233.4 (187.0) (105.2) (89.2) 204.1 82.4 141.6Ebitda Margin 64.4% 68.5% ( 3.7%) ( 2.0%) ( 14.1%) 29.4% 2.5% 3.8%Cumulative results by segment (billion COL$)E&P Refining Transport Supply and MarketingBillion COL$ 2012 2011 2012 2011 2012 2011 2012 2011Local Sales 15,219.7 15,179.9 16,877.6 16,968.4 2,533.4 2,363.1 1,128.1 1,130.8Exports 23,564.1 21,352.0 3,300.3 3,470.5 0.0 0.0 12,669.2 12,266.4Total Sales 38,783.8 36,531.9 20,177.9 20,438.9 2,533.4 2,363.1 13,797.3 13,397.2Operating Income 22,858.8 22,984.5 (397.3) 10.3 134.1 657.4 260.8 699.6Operating Margin 58.9% 62.9% ( 2.0%) 0.1% 5.3% 27.8% 1.9% 5.2%Net Income 15,664.8 15,468.9 (768.1) (601.1) 5.6 354.9 70.8 225.7Net Margin 40.4% 42.3% ( 3.8%) ( 2.9%) 0.2% 15.0% 0.5% 1.7%EBITDA 26,559.9 25,945.2 131.0 494.5 607.3 984.8 274.4 705.8Ebitda Margin 68.5% 71.0% 0.6% 2.4% 24.0% 41.7% 2.0% 5.3%

152These events affected the cumulative result for2012, in addition to the scheduled maintenancein the Barrancabermeja refinery during thefirst quarter, which affected the refining marginupon reducing loads and increasing fuel importrequirements to ensure supply.TransportThe financial results for the fourth quarter of theyear, and during 2012, were lower than thoseachieved during the same periods of 2011.The segment was affected by increased costs formaintenance and safety activities for the transportinfrastructure.Exploration and productionThe segment’s income in the fourth quarter of 2012was lower than sales income in the same periodof 2011, due to lower sales prices for the crudesbasket. Costs were higher compared to the fourthquarter of 2011, mainly in partnership services,maintenance and project costs, generating loweroperating and net results.The cumulative results show higher net profitcompared to the previous year as a result of theincreased production achieved and the betteraverage price for the crudes basket.Finally, the segment allocated new resources foraccelerated implementation of maintenance workwithin the framework of the integrity program.Supply and marketingThe segment’s results for the fourth quarter of2012 decreased compared to the same period lastyear mainly due to: 1) lower gas sales volumes (seeexplanation on page 4), 2) lower oil and gas salesmargins, and 3) increased costs for the transport ofcrude oil purchased and diluent.These effects are also reflected in the cumulativeresult for 2012, coupled with increased costs forpurchases of imported diluent compared with theprevious year.RefiningThe segment’s financial results for the fourthquarter of 2012 were lower than those achieved inthe same period of 2011, mainly due to: 1) highermaintenance costs and 2) higher operating andmarketing expenses.

Economic Dimension153

154Environmentaldimension04EnvironmentalManagementStrategicenvironmentalfocusEnvironmentalmanagementof energy

Environmental dimension155Environmentalmanagementof solidsEmergencymanagementEnvironmentalmanagementof waterBiodiversity

EnvironmentalmanagementAware that its operation must be in harmony and in balancewith its stakeholders and the environment, Ecopetrol includesenvironmental management within its Corporate Policy andStrategic Framework 2011-2020 as an explicit guiding principlefor generating value to the organization through processesand products that, thanks to a minimal environmental impact,contribute to the sustainable development of the company, theareas where it operates and the country as a whole.Barrancabermeja Refinery

Environmental dimension157New corporateenvironmental guidelinesThus, during 2012 Ecopetrol developed newenvironmental guidelines at the corporate level,within which the following are highlighted:Guideline 1 Guideline 2 Guideline 3Procedure for theEnvironmental Assessment ofNew Business Opportunities,whose aim is to haveguidelines on environmentalassessment for due diligence,acquisitions or mergersfor projects or businessopportunities.Guide for theManagement of PolychlorinatedBiphenyls (PCBs) in Ecopetroland the respective PCBinventory implementationinstructions for the company.This guideline seeks todetermine the company’scurrent situation regardingthe use of PCBs, or itemscontaminated withthese compounds, andensure compliance withthe obligations undernational regulations andinternational agreementssigned by the country.Guide for the deliveryof Ecopetrol’s annualenvironmental information tothe Comptroller General of theRepublic, whose objective isto have a procedure for thecompletion and delivery ofenvironmental informationthat is requested annuallyby the control body fromState entities.EnvironmentalmaterialityThe determination of the materiality ofenvironmental indicators considers, among othersources, the concerns expressed by Ecopetrolstakeholders through its normal practicesand channels such as public audiences onaccountability; requests for information; rightsof petition, complaints and claims receivedthrough the Citizen Participation Office; concernsexpressed through the form on the website;conversations with peer companies; expertopinion; participation in specialist events andsectoral committees, as well as regional roundtables,which specifically address the issue of theenvironment.In addition to the above are results offered by certainspecific studies undertaken by external partiessuch as Corporate Benchmarking conducted bySustainability Investing (SAM), by Centro Vincularand by The Reputation Institute (RI).

158DJSI RankingFor SAM, the company that annually producesthe ranking for the Dow Jones SustainabilityIndex (DJSI) (an essential tool for companieslike Ecopetrol that trade ADRs on foreign stockexchanges such as the New York Stock Exchange(NYSE) and the Toronto Stock Exchange, Canada)the environmental dimension has a specific weightof 27%, with eight highly representative criteria foractions in categories like oil.The SAM study results for the period August 2011 toAugust 2012, show that in terms of the environment,Ecopetrol performs better than 80% of all oilcompanies analyzed.Ecopetrol’s environmental aspects that weremost positively assessed by SAM are: Clean Fuels,with the highest score (100 points), followed byEnvironmental Reporting (83), Biodiversity (82),Climate Change Strategy (75) and Discharges intothe Environment (70) .The main challenges that can be drawn fromthis study are the need for further progress inOperational Eco-efficiency, which scored 55points, and Water-Related Risks, which scored50 points, although in terms of Water there hasbeen significant progress in relation to the aboveprocess, represented by an increase of 38 points ina single year.Centro VincularThe study prepared by Centro Vincular takes intoaccount the views of seven Ecopetrol stakeholders,in accordance with what it has established in itsrelations model: Shareholders and Investors,Employees, Retirees and their families, Contractorsand their employees, Customers, Communities,State and Partners.For this work, 70 people from five regions wereinterviewed: North (Cartagena), MagdalenaMedio (Barrancabermeja), South (Neiva), Llanos(Villavicencio) and Bogota.Regarding environmental issues, this studygathered the views of the community, whichexpressed that the company should “Takeresponsibility for social impacts and deepen respectfor the environment.”The Reputation InstituteThe study by the Reputation Institute is conductedevery two years, such that the values ​for 2011 arestill valid. In this regard, the reputation of Ecopetrolis at 76.2 points, 12 points higher than the industryaverage (64.2 points) and 14.81 points higher thanthe energy sector (61.39).The score obtained by the environmental dimensionin this study is similar to that of the other attributesconsidered, but according to this methodologyit is the dimension that least contributes to thereputation of the company.Turtle conservation project. Llanero wetlands.

Environmental dimension159MaterialityThus, considering all the views expressed, inaddition to the methodology established by GRIG3.1 and the Oil & Gas supplement, a specificanalysis was performed of the materiality,relevance or pertinence of environmentalmanagement, which established that the mainissues to be developed in this chapter are:Strategicenvironmental approach• Strategy• Control structure• EnvironmentalinvestmentsEnvironmental energymanagement:• Energy• Eco-efficiency• Biofuels• Climate change• EmissionsEnvironmentalmanagement of solids• Materials• Solid waste• Process of abandonment,recovery and finaldelivery of wellsEnvironmentalmanagement of waterThe SAM study resultsshow that in terms of theenvironment, Ecopetrol performs• Water withdrawal• Risks associated• with water• Initiatives for good watermanagement• Discharge• Environmentalemergency responsebetter than 80% of all oilcompanies analyzed.Biodiversity• Strategies for managingimpacts• Management of highdiversityareas• Protected species• National call tobiodiversity

160Strategicenvironmental focusMale iguana. Barrancabermeja

Environmental dimension161Management strategyIn order to ensure the sustainability of Ecopetrolin the 2012 - 2020 period, in 2012 the focus ofthe environmental management strategy wasrevised and adjusted, taking into account the newchallenges facing the organization in environmentalmatters, relating to greater regulatoryrequirements, international commitments andstakeholder expectations.Greater environmental requirementsGreater regulatory requirementsfrom the authorities• Regulation onenvironmental licenses.• Discharge andemissions standards.• Manual on compensationfor loss of biodiversity.• Use and quality of water resources.• Recognition of new parks,wetlands, paramos and reefs.• Environmental sanctionsand criminal code onenvironmental issues.• More stakeholders inenvironmental permit processes.International requirementsand commitments• International protocols andagreements (Rio+20, Kyoto,Biodiversity).• Market restrictions.• Rates or taxes on carbonemissions.Greater expectations fromcommunities and other stakeholders• Increased use of mechanismsfor citizen participation bystakeholders in the developmentof oil projects in terms ofenvironmental impacts and theimprovement of living conditions.

162Strategicenvironmental focusTo address these external conditions and continuecontributing to the sustainability of the company, Ecopetroldefined a new environmental strategic focus to ensure highenvironmental standards in operations and projects.This new environmental strategic focus has four lines ofaction:Legal environmental compliance in the operation and projectsEnvironmentalViabilityOperationalExcellenceEnvironmentalManagementof waterSustainabilityProactiveEnvironmentalManagement:BiodiversityClimate ChangeEco-efficiency

163Environmental viabilityThis strategic line aims to enable the company’sprojects and operations in a timely manner, towhich end it is sought to improve the processof obtaining environmental permits, as well asto implement specific actions to strengthenenvironmental inter-institutional relations.The main activities of this line are theimplementation of the early action project,improvement in the definition and development ofproject designs, and quality assurance for studiespresented to the environmental authorities.Also in place are the projects for institutionaland technical strengthening with environmentalauthorities, as well as joint work with them.Operational excellenceThis strategic line aims to achieve an operationwith minimal environmental impact through theassurance of legal compliance, the implementationof projects and programs to reduce emissions,discharges and waste, the improvement anddiversification of energy, and the implementation ofprograms for operational integrity, contingency plansand emergency response.Environmentalmanagement of waterEcopetrol is aware that the natural resource of water isfundamental to the sustainability of its operations.With this in mind, this strategic line was defined toseek efficient options for the management of theresource, in order to reduce conflicts regarding wateruse and discharge generation, as well as to ensurelegal compliance in water management.Proactive environmentalmanagementhis strategic line aims to make an environmentalcontribution to the country that goes beyond theregulatory compliance of operations, and fulfill theobjectives of the National Development Plan inenvironmental matters.This line seeks to leverage corporate sustainabilitythrough programs and projects for theconservation, preservation and sustainable use ofbiodiversity, the implementation of projects andinitiatives that reduce greenhouse gas emissions byaiming for a low level of carbon emissions, and thegeneration of eco-efficiency standards.Ecopetrol defined a new environmental strategicfocus to ensure high environmental standards inoperations and projects.

164Control structureThis environmental strategy is based onthe assurance of the process and thedifferentiation of roles between managementand execution, as follows:Environmental governanceAn Environmental Management Unit responsiblefor environmental management, the assuranceof the environmental viability of operations andprojects, and the monitoring of the organization’senvironmental management performance, andwhich forms part of the HSE Department.PADCVHSDHSManagementEnvironmentalUnitEnvironmental viabilityPerformance check

Environmental dimension165Environmental operationAn environmental operation under the responsibilityof project departments and regional departments,which are responsible for implementing their ownenvironmental plans and the control thereof.ProjectManagersProjectsThe strategy The tactic Definition and execution orientedtoward the operationIdentification ofSelection ofDefinitionExecutionEntry intothe opportunitythe optionof the projectoperationProfessionals assuring HSE and Social rolePADCRegionalManagersDepartmentof IntegratedOperational RiskManagement Execution and control of plansOperation

166Environmental investmentThese investments are broken down as follows:Figure 22.Environmental expenditure and investments(Figures in millions of pesos)$190,131million137,7992005257,3622006303,6702007507,82120081,311,635988,284611,7752009201020111,160,7712012for environmentalinvestment in drinkingwater and basic sanitation,represented by projects andprograms in wastewatertreatment, construction andimplementation of worksfor the supply of drinkingwater, and the managementand disposal of solid andhazardous waste.Source: Ecopetrol, Vice Presidency of HSE and SustainabilityThese figures correspond to the information that is submittedto the Comptroller General of the Republic, in accordance withreports that come from each vice presidency.$270,477millionfor environmentalinvestment in riskmanagement,represented by disasterprevention programs,disaster responsesupport and post-disasteractivities.$2,039millionfor investment inurban environmentalmanagement.$37,059millionfor environmentalinvestment aimed atforest restoration andprotection programs.$254,239millionfor environmentalinvestment inthe execution ofenvironmentalstudies, diagnostics,legal procedures,audits, operationand maintenanceof equipment andmonitoring networks,and others associatedwith environmentalmanagement, such asinvestment in education,development andadministrative issues.

Environmental dimension167In 2012, Ecopetrol invested $ 1,160,771million in various environmental programs(see Table 30).$45,201millionfor environmentalinvestment aimed at thenatural resource of water,consisting of programs forthe recovery and protectionof this natural resource, aswell as the purchase andinstallation of equipmentfor control and monitoringof the quantity and qualityof surface and groundwater resources.$59,929millionfor recovery andprotection programsfor the natural resourceof air, represented byequipment acquisitionor the development ofproduction technologiesfor reducing emissions.$10,218millionfor environmentalinvestment in biodiversity,highlighting investmentsin programs and projectsfor the preservation,conservation and rationaluse of biodiversity both atthe corporate level, and inthe company’s operatingareas.$291,478millionfor recovery andprotection programsfor the natural resourceof soil, represented bymanagement and physicalprotection works for soil(geotechnical protectionprograms).Expenditures and investments made in2011 were 11.5% lower than those executedin 2011 (see Figure 22), and represented avalue of $1,311,635,000 (one billion threehundred and eleven thousand six hundredthirty-five million pesos).DescriptionThis decrease is becauseenvironmental compensationprojects in some areas of thecountry were implementedon a large scale during 2011.Likewise, the reduction inthe number of drilling rigs in2012 resulted in a decrease inenvironmental expenditures(investments in water treatmentand solid waste disposal,monitoring, among otheractivities).Table 30.Environmental investment 2012Millionsof pesosInvestment in protection andrecovery programs for renewablenatural resources (water - air -soil - forests - biodiversity) 443,885Environmental investmentin risk managementEnvironmental investment relatedto the company’s operation(environmental studies, legalprocedures, audits, maintenance,monitoring, education anddevelopment activities)270,477254,239Investment in drinking waterand basic sanitation 190,131Investment in urbanenvironmental management 2,039TOTAL 1,160,771Source: Ecopetrol, Vice Presidency of HSE and Sustainability

168Balancedmanagement scorecardIn its balanced management scorecard, Ecopetrolincludes three environmental indicators (KPI), whichare monitored quarterly. They are:Indicator 1Environmental incidentsdue to operationalcausesIndicator 2Barrels spilled inenvironmental incidentsdue to operationalcausesTurtles, ATSAPANI project, Llanero Wetlands.Indicator 3Reduction ingreenhouse gasemissionsFor each one of these, informationis presented regarding the targetsor maximum limits set for 2012,the achievements in each of theindicators and the targets set for2013 (see Table 31).

Environmental dimension169Table 31.Environmental indicatorsIndicator Unit Target 2012 Actual value 2012 Target 2013Environmental incidentsdue to operational causesBarrels spilled in environmentalincidents due tooperational causesReduction in greenhousegas emissions, relativeto the business as usualscenarioNumber 31 27 31Barrels 710 2,050 710Tons reduced 279,085 280,257 133,518Source: Ecopetrol, Vice Presidency of HSE and Sustainability

170Environmentalmanagementof energyIn order to achieve the MEGA-TARGET of reaching one millionthree hundred thousand clean barrels in 2020, the company makessignificant efforts in terms of energy, optimizing and rationalizingthe energy sources used in the production process by reducingconsumption, costs, CO2 emissions and risk in the use of sources,thereby increasing operational efficiency, reliability, processcompetitiveness and diversifying energy sources.Rubiales Field

Environmental dimension171Thus, this section addresses the issues related to environmentalmanagement in energy, eco-efficiency, biofuels, climate change andatmospheric emissions, so as to understand the comprehensive workundertaken by the company, from the origin of the energy sources to thegreenhouse gases emitted, covering the measures aimed at reducingenergy consumption, improving its fuels and producing alternative fuels.EnergyThe energy matrix for 2012 shows no significantvariations in the use of sources, i.e. natural gas,liquid fuels and electricity.Energy consumptionEnergy consumption for 2012 was 37,090 barrelsof oil equivalent per day (BOED), i.e. 14.1% morethan the consumption in 2011, year in which 32,503BOED was reached (see Figures 23, 24 and 25).Natural gas consumption decreased from 88 to87%, while liquid fuels increased from 9 to 10%,and electricity remained at 3%.Figure 23.Energy consumption of Ecopetroland associated companies in 2011Figure 24.Energy consumption of Ecopetroland associated companies in 20129%3%10%3%87%88%Natural Gas 32.089Electricity 947Liquid Fuels 3.467Natural Gas 32.414Electricity 1.097Liquid Fuels 3.579Source: Ecopetrol, Vice Presidency of Supply and MarketingSource: Ecopetrol, Vice Presidency of Supply and Marketing

172Figure 25.Ecopetrol’s energy consumption (BOED)350003000032,08927,80532,424Natural GasLiquid FuelsElectricity2500020000150001000050003,4674,974947 8973,3791,0970201020112012Source: Ecopetrol, Vice Presidency of Supply and MarketingStanding out is the saving of 4.7 million dollarsper year in energy consumption due to the entryinto operation of two new projects (TermocoaLM6000 Conversion and electrification of the SanRoque - Tisquirama fields), which decreased energyconsumption by 449 BOED.Energy processesIn 2012, the assurance of the energy processesin Ecopetrol continued, through the followingprojects: Integrated Project Management(Genome) and Integrated Supply ChainManagement (GICS).Moreover, 90% was achieved in theimplementation of Energy Management KeyPractice, for which 30 staff were trained fromdifferent operating areas.EfficiencyIn 2012 the buildings energy audit for Bogota wascompleted, resulting in potential energy savings of497,000 kWh / year, equivalent to 124 MCOP / yearand 145 tons of CO 2 / year.Also, a review was commenced on the feasibility ofenergy recovery in Vasconia station and La Bellezareducing station.ReliabilityWithin the framework of the safety assessment forelectrical installations and the topological surveyfor systems associated with energy sources, during2012 the baseline indicator for the reliability ofEcopetrol’s energy supply was created.

Environmental dimension173EnergydiversificationIn 2012 work was done for energy recovery inpipelines, geothermal energy, solar and windpotential, as well as Small Hydro Power (SHP).Energy recovery in pipelinesThe survey and analysis of information wasconducted, such that in 2013 ​a feasibilityassessment will be performed for the undertaking ofa project to optimize energy use, reducing costs, thecarbon footprint and improving the reliability of theVasconia system.Geothermal energyThe strategy’s definition phase was commenced forthe potential development of this resource.Study of solarand wind potentialRelevant meteorological information was obtainedthat identified six potential wind power generationprojects.Additionally, 14 points were identified with solarenergy potential for thermal application.Small Hydro Power (SHP)n and viability for Small Hydro Power (SHP) plantswere completed, and the feasibility stage forEcopetrol’s operation in the departments of Tolima,Huila and Putumayo is underway.

174BiofuelsEcopetrol, certain of the opportunity presentedby biofuels for sustainable development, during2012 continued researching alternative feedstocksand maturing business initiatives, followinginternational best practice for project analysis.Progress in researchon alternative feedstocksThe company has continued progressing research,based on three focuses:Focus 1Obtaining inexpensivefeedstocks that arenot affected by marketspeculation, as with thecase of food.Focus 2Finding new uses for thebyproducts of the process,minimizing environmentalrisks and maximizing theprofitability of projects.Inexpensive feedstocksIn this first aspect, research has been furtherdeveloped through collaboration agreements withpublic and private entities, initiated in 2008, andwhich focus on the Jatropha Curcas species, oneof the most promising feedstocks in the productionof oil for Biodiesel. With this species, conclusiveresults have been obtained that will enable thestudy to be directed towards similar areas wherethe crop performed better.In this same regard, work is being done with theSolazyme company, which is a leader in algae oilextraction technology, with a view to using this inthe production of biodiesel, for which Colombianfeedstock such as crude glycerin and cane juiceare being tested as feed for algae crops.New uses for the byproducts of the processUnder this second focus, which has been workedon since 2008, concrete results have beenachieved. The 2009 Colciencias - Ecopetrol callawarded $1,000 million for research into the use ofby-products as a feed supplement for poultry andpigs through the Corpoica research center.Focus 3Taking advantageof underutilized ordegraded land, generatingemployment and ruraldevelopment.In 2012, research was concluded with favorableresults for the use of crude glycerin in the diet oflaying hens of up to 15% and in pigs up to 10%,recording digestibility greater than 87% and ahigh energy intake. The result of this research hasalready benefited many biodiesel plants in thecountry and concentrated food manufacturersthat have begun to replace imported high-costfeedstock, particularly yellow corn.

Environmental dimension175Ecopetrol is researching alternative uses forvinasse, the main by-product of the ethanolindustry, which has great potential as a fertilizeron land in high plainsFor its part, Ecopetrol’s Colombian PetroleumInstitute (ICP) is researching alternative usesfor vinasse, the main by-product of the ethanolindustry, which has great potential as a fertilizer onland in high plains, where the company’s alcoholfuel project is located.In 2010 the first analyses were completed, in2011 development continued, while in 2012the ICP achieved solidification of the vinassethrough thermochemical processes, making itpossible to develop a solid material with porouscharacteristics, which is very stable, improves thesoil’s structural conditions, provides elementssuch as potassium and hosts microbiotabeneficial to crops.This product is being patented under theEcocarbovin name and in 2013, larger scaletesting will commence on sugarcane crops in theColombian high plains area.Use of underutilizedor degraded landWhile under the third focus (which is the useof underutilized or degraded land, generatingemployment and rural development), inpartnership with Corpoica and Incoder, work hasbeen done since 2008 on the feasibility of a projectfor Ethanol from sugar cane or sweet sorghum, inhigh plains lands in Meta. In 2011 it was found thatalthough the results were not favorable, this land issuitable for the cultivation of other products tradedin the region.Progress in researchfor the production of biofuelsIn terms of the biofuels production project,initiatives have been generated that seek toleverage long-term biofuels, which in 2012experienced the following progress:Pyrolysis• The milestone was reached of adapting thereactor at Universidad Nacional de Medellín(UNALMED) to conduct runs for the controlled,repeatable and reproducible fast pyrolysis ofbiomass to obtain bio-oil.• Construction began of the hydrocracking pilotplant for upgrading pyrolysis oil.• An approach to Dynamotive began, a worldleader in the production of pyrolysis oil, withthe aim of testing the lignocellulosic biomassesthat are of interest to Ecopetrol, using theirtechnology.

176The Superintendence of Industry and Commerceawarded Ecopetrol the patent for the Processtechnology for production of diesel fromvegetable or animal oils through hydrotreating.Lignocellulosic ethanolIn this line of second-generation biofuels, allmilestones were met concerning the testing ofpretreatment for the selected biomass , such assugarcane bagasse, palm rachis and plantain rachis.The results obtained will be examined andcompared with the analyzes to be carried out in theNational Renewable Energy Laboratory (NREL), astrategic partner of Ecopetrol in this research.BiojetAn agreement was signed with the French firmAxens to develop the characterization and testingfor production from crude palm oil and palm kernelin a pilot plant.These tests will provide information on the yieldsachieved for biojet, renewable diesel and otherby-products, as well as the consumption of rawmaterials such as hydrogen and catalysts.The information collected will make it possible toanalyze the economic and operational feasibility ofsetting up a plant dedicated to this fuel.Blends of ethanol and gasolineAfter four years of work, we reached the endof the research project in partnership betweenthe Ministry of Mines and Energy, UniversidadTecnológica de Pereira and Ecopetrol, for 400,000kilometers of performance tests comparing thebehavior of the blend of 20% ethanol and 80%fossil fuel gasoline (E20) to the mixture of 10%ethanol and 90% gasoline (E-10).This work showed that it is technically possible togo from E10 blends to E20 blends in the vehiclesstudied (Aveo injection and Sprint carburetion),which are considered as representative of theColombian vehicle fleet.Also, as a result of this agreement, UniversidadTecnológica de Pereira was left with a laboratoryinfrastructure that is set up and in operation forroad tests, which will facilitate the undertaking ofpre and post graduate theses, the basis for theformation of an incubator for new Biofuels researchgroups.Removal of pollutants from BiodieselLaboratory tests conducted by the research projectdeveloped in partnership between Ecopetrol andEcodiesel, which seeks to remove pollutants (HAZE)from biodiesel produced from crude palm oil, showsignificant HAZE mitigation performance and willbe taken to pilot scale in a plant that was assembledand put into operation in December 2012 inEcodiesel.In parallel to these tests, according to theperformance demonstrated in 2013, a patent willfiled to license the process. Once this license hasbeen obtained, Ecopetrol and Ecodiesel will be in aposition to market it at an industrial scale.

Environmental dimension177New businessIn addition to research, followinginternational best practices inproject analysis and Ecopetrol’sproject maturation andmanagement model, during2012 progress has continued inthe maturation of three businessinitiatives:Expansion of the productioncapacity of Ecodiesel’sbiodiesel plant, whichadvanced in phase II.Progress in Phase II of theproject for the co-processingof palm oil with fossil dieselstreams (Biocetano) inHydrotreating Units in theBarrancabermeja Refinery, aproject that moved forwardin phase II and in technical,legal and regulatory terms,and brought GDR onboard tocontinue its maturation.Implementation of Phase I ofthe production of feedstockfor biofuels based on the useof produced water from theCaño Sur Este field.Opportunities discardedAnalysis was performed of twoother business opportunitiesin biofuels: Canta Claro andrenewable diesel production inthe Apiay refinery, which werediscarded due to not complyingwith the company’s minimumprofitability requirements.With the first, it was sought togive life to a project initiated bythe GPC group, which aimedto produce 20,000 liters a dayof ethanol from cassava, andthe second, to make use ofavailable services infrastructurein the Apiay refinery, for theproduction of renewable dieselfrom crude palm oil.BiocetanoProgress was made in Phase II ofthe project for the Co-processingof palm oil with fossil dieselstreams in Hydrotreating Units inthe Barrancabermeja Refinery,within which progress wasmade in technical, policy andregulatory definitions.At the same time that Ecopetrolcontinues to advance in thetechnical analyses that will allowthe production of Biocetano®in its refineries in the mediumterm, the country is makingprogress in the regulatory workrequired for renewable diesel (asthis biofuel is known worldwide)to become part of the Colombianenergy mix.In 2012, the Superintendenceof Industry and Commerceawarded Ecopetrol the patentfor the Process technologyfor production of diesel fromvegetable or animal oils throughhydrotreating, with reducedresidence times and productsobtained therefrom, developedin the laboratories of theColombian Petroleum Institute.With this patent, Ecopetrol hasthe ability to make exclusive useof the technology to produceBiocetano® for a period of 20years in the country (2007-2027).

178HistorySince entering operationsthe Biodiesel Plant hasproduced 1,795,915barrels. Of these, 804,133barrels correspondto the production in2012 and 718,149 in2011, an increase inproduction that showsan improvement in theefficiency of the plant’sproduction, the result ofPhase II of the projectcoming into operation.ProductionFor the productionof biodiesel, 25,000hectares of palmcrop are used, whichhas generated 1,500agriculture jobs and 6,100indirect jobs. Additionally,the plant generates50 direct jobs, fourinternships and 23 jobsthrough outsourcing.Volumeof biofuelsproduced in 2012:112,826tons of biodieselShareholdingEcodiesel Colombia S.A.,a company in whichEcopetrol has a 50%shareholding, beganoperations in June 2010.IncomeThe biofuels traded byEcodiesiel in 2012 were106,445 tons, with anincome of $277,976million and an EBITDAof 12.8%.Volumeof biofuelssold in 2012:111,765tons of biodieselCapacityThe plant has aproduction capacity of100,000 tons of biodieselobtained from refiningcrude palm oil (CPO)per year, with an averageof 2,000 Barrels perCalendar Day (BCD).

Environmental dimension179ObjectivesGiven the nature of cleanenergy, this project willhave a positive impactin environmental terms:agricultural development willinclude 100% mechanizedharvesting, avoiding theburning of leaves; an adequatebiofertilization process withindustrial waste; biologicalcontrol of pests and diseases;use of agricultural processwaste to produce the energyrequired by the industrialprocess, and sale of surplusto the country’s electricityinterconnection system.EmploymentgenerationOnce BioEnergy is fullyoperational, it will generate406 direct jobs and 2,030indirect jobs.ShareholdingEcopetrol has a 91.43%shareholding in the BioEnergycompany, which is an ethanolproduction project expectedto produce 115 million litersper year from the second halfof 2013, from when it will enterinto commercial operation.It is currently in Phase I forthe production of feedstockfor biofuels from the use ofproduced waters from theCaño Sur Este field.CapacityThe project includes bothindustrial development andagricultural development.In 2011, construction ofthe plant began, whichalready has a progresslevel of 50%, whileagricultural developmentincludes 14,500 hectares ofsugarcane, of which 5,514hectares have already beenplanted.InfrastructureIt has eight water reservoirsfor crop irrigation in thedry season, 25 kilometersof secondary and tertiarypassages, and a forestrecovery reserve of 100hectares, in which speciesnative to the region will beplanted.

180Climate changeDuring 2012, progress was made in implementingthe action lines set out in the climate strategy,with achievements in the greenhouse gasesinventory; implementation of projects to reduceGHG emissions; construction of portfolios ofprojects with emissions reduction potential andoffsetting projects through forest conservationand restoration activities; identification ofareas vulnerable to climate change impacts;research on carbon sequestration andstorage; international strategic alliances, andparticipation in the creation of policy documentsat the national level.In 2012, 13 projects were implemented inprocess optimization, energy efficiency and gasuse, representing a reduction over one year ofoperation of 280,257 tons, meeting the target setfor 2012 (279,000 tons).For 2013, new projects were identified withpotential emission reductions over one year ofoperation of 133,500 tons.This target is part of the Balanced ManagementScorecard (BMS) for 2013, through which seniormanagement monitors targets quarterly.Emissions reduction portfolioIn order to have an organized portfolio of projectswith potential to reduce GHG emissions thatenables the identification of priority investmentsrelated to climate change mitigation in the comingyears, a methodology for managing this portfoliowas created.As a result of this methodology, there is a firstportfolio that includes 47 projects in energyefficiency, the development and use of gas,and fuel switching, in different stages ofdevelopment, which will be implemented overthe next eight years.Emissions offset portfolioA methodology was also developed for thecreation of a portfolio of carbon offset projectsthrough forest conservation and restorationactivities, potentially financed from voluntaryresources, generating results of impact incarbon sequestration, biodiversity gains andimprovement in the quantity and quality of water,and contributing to meeting the targets set by thegovernment in the National Development Plan andin international agreements signed and ratified bythe country, such as the Convention on BiologicalDiversity (CBD).The creation of this first portfolio of carbon offsetprojects involved 24 national and regional publicbodies, including the Ministry of Environment andTerritorial Development, National Parks, RegionalAutonomous Corporations, Universities andenvironmental NGOs, identifying 20 projects withpotential for implementation in the next five years.Early warningsIn order to progress in the identification of areasvulnerable to climate change impacts and haveearly warnings that make it possible to decreasethe risk of landslides due to rain in areas of highgeotechnical susceptibility, monitoring is beingcarried out on the vulnerability of the transportinfrastructure with regard to this climaticphenomenon.As a basis, this monitoring uses dailyprecipitation forecast information obtainedby applying GFS, WRF and MM5 probabilisticmodels, and cumulative daily precipitationinformation using GOES weather satelliteimages, provided by the Institute of Hydrology,Meteorology and Environmental Studies(IDEAM).The target for the coming years is to have climaticzoning for all the rights-of-way of Ecopetrol’sinfrastructure and perform real-time monitoringof climate variables in infrastructure sectorsconsidered critical due to geomorphological,geological and land use conditions.

GHG emissionsreduction:2012 target279,000Tonstarget met280,257TonsCO2e SequestrationEcopetrol formulated a project to identify thepotential for the sequestration of carbon dioxideequivalent (CO2e) in its operations, as well asthe storage potential in reservoirs and geologicalformations studied and characterized in Colombia.This project includes the participation of severaluniversities from the United States, Canada andEurope, with the aim of establishing synergiesbetween the sequestration, storage and potentialuse of CO2e, for which between 2013 and 2015 astudy will be undertaken in the Barrancabermejarefinery and its surrounding fields.During 2012, Ecopetrol took part in thedevelopment of the Colombian Strategy forLow Carbon Development, established by theGovernment, forming part of high-level andexpert committees and providing technicalinformation on emissions, carbon intensityindicators and sectoral projections.With the Ministry of Environment, workis being done on identifying internationalfunding options through bilateral andmultilateral cooperation, international fundsand carbon markets, to attract financialand technical resources to enable thedevelopment of projects that reduce thecompany’s GHG emissions.

182Improvement of fuelsIn 2012 Ecopetrol initiated a series of actions tounify the sulfur content in diesel and so, as of 1January 2013, distribute clean diesel of 50 parts permillion sulfur (ppm) throughout the country, a fuelthat since 2010 was already being deliveredin Bogota, the Aburrá Valley and the country’smass transit systems.Texaco ServiceStation inBogota. CleanDiesel Campaigncontent and coverage rate), thus entering theera of clean fuels to improve air quality. This is anew milestone in the development of Ecopetrol’scorporate strategy to improve the quality of the airColombians breathe, as part of its corporate socialresponsibility.The reduction of sulfur in diesel becomes moreimportant if one considers that in the last five yearsColombia has gone from consuming 95,000 to110,000 barrels per day, and projected demandcontinues to rise.With the distribution of diesel with lower sulfurcontent to the whole country, Colombia rankssecond in South America, second only to Chilein the quality of its diesel fuel (considering sulfurDieselBelow is the performance of diesel qualitycompared to current regulations(see Figures 26 and 27).Figure 26.Sulfur content in diesel in Bogotá(Figures in parts per million - ppm)Norm5028333331312018222425192121252112151011 1179mar-11apr-11may-11jun-11jul-11aug-11sep-11oct-11nov-11dic-11jan-12feb-12mar-12apr-12may-11jun-12jul-12aug-12sep-12oct-12nov-12dic-12Source: Ecopetrol, Vice Presidency of Supply and Marketing

Environmental dimension183Figure 27.Sulfur content in diesel in the rest of the country(Figures in parts per million - ppm)Norm5001301352042411792251831381981812272321691502391852571561571172322mar-11apr-11may-11jun-11jul-11aug-11sep-11oct-11nov-11dic-11jan-12feb-12mar-12apr-12may-11jun-12jul-12aug-12sep-12oct-12nov-12dic-12Source: Ecopetrol, Vice Presidency of Supply and MarketingGasolineIn the case of gasoline, sulfur content is identical acrossthe country, with levels below the maximum allowed bythe environmental standard (see Figure 28).Figure 28.Sulfur content in gasoline in the country(Figures in parts per million - ppm)GasolineNorm300250232215228230233240238192237228226243212161144178185163188 188192mar-11apr-11may-11jun-11jul-11aug-11sep-11oct-11nov-11dic-11jan-12feb-12mar-12apr-12may-11jun-12jul-12aug-12sep-12oct-12nov-12dic-12Source: Ecopetrol, Vice Presidency of Supply and Marketing

184AtmosphericemissionsinventoryIn 2012 the followingactivities were carried out,among others:Activity 1Standardization andupdate of the methodologicalguide for estimatingemissions, according to therecommendations of thepre audit by internationalexperts under the principlesof ISO14064.Activity 2Inclusion of newoperations in the 2012estimate.Activity 3Review and update ofemission models.

Environmental dimension185Atmospheric emissionsof GreenhouseGases (GHG)Ecopetrol’s estimated GHG emissions for 2012totaled 7,122 kilotons of CO2e (see Table 32),similar to the 7,129 kilotons recorded in 2011.In the 2011 management report, 6,722 kilotonswere reported because the fourth quarter isestimated in relation to the first three quarters and,subsequently, it is adjusted to the actual figures.Moreover, Figure 29 shows the results of theemission source inventory: combustion, mobilesources, venting / process, fugitive, flares andelectricity consumption. Also, in Figures 30 and 31,direct and indirect emissions are broken down byprocess.Figure 29.Total GHG emissions by source typekilotons of CO 2 e8000700060005000400030002000100002009201020112012Source: Ecopetrol, Vice Presidency of Innovation and TechnologyFigure 30.Indirect GHG emissions by process300250ElectricityFlaresFugitiveVentingCombustionRefiningTransportProductionkilotons of CO 2 e2001501005002009201020112012Source: Ecopetrol, Vice Presidency of Innovation and TechnologyTable 32.Annual Emission of CO 2, in KilotonsFigure 31.Direct GHG emissions by Vice PresidencyScope 2009 2010 2011* 2012**Direct/Scope 1 5,714 5,540 6,919 6,871Indirect/Scope 2 167 188 210 251Total 5,881 5,728 7,129 7,122kilotons of CO 2 e8000600040002000RefiningTransportProduction* Data adjusted based on information validation.** Corresponds to information inventoried for the first three quarters and averagedfor the fourth quarter. This data may change once the definitive information isobtained.Source: Ecopetrol, Vice Presidency of Innovation and Technology02009201020112012Source: Ecopetrol, Vice Presidency of Innovation and Technology

186Carbon intensityThe carbon intensity indicators for the activities ofproduction, refining and petrochemicals, calculatedfor 2012, were as follows (*):Production22,8kgCO 2e/BEPRefining and Petrochemicals32,8kgCO 2e/Barrel Loaded* Correspondsto informationinventoried for the firstthree quarters andaveraged for the fourthquarter. This datamay change once thedefinitive informationis obtained.Source: Ecopetrol,Vice Presidencyof Innovation andTechnology.Global Methane InitiativeContinuing the work begun in 2011, in March 2012cooperation agreements were signed with the UnitedStates Environmental Protection Agency (EPA)and Canada’s Ministry of Environment, in order tostrengthen the technical capacity of the company inthe management of GHG emissions through the GlobalMethane Initiative and the development of NationallyAppropriate Mitigation Actions (NAMA) for improvementopportunities in energy efficiency.Within the framework of these agreements,measurement and pre-feasibility studies were conductedfor the recovery of methane leaks and venting, in the DeMares Operations Superintendence in Magdalena Medio.Thus, by installing vapor recovery units, in addition toleak inspection and maintenance activities, and therecovery and adjustment of compressor components,the aim is to recover 100 million cubic feet of methanegas per year, corresponding to a reduction 40,000 tons /year of CO 2equivalent.Additionally, in the stations Acacías, Castilla 1, Castilla2 and Chichimene, measurements were performed onthe flow and composition of gas sent to flares in order toevaluate the potential for gas recovery and energy use, aswell as to identify and quantify emissions in separationand storage tanks. Emissions of associated gas werealso quantified in wells from the Castilla and Chichimenefields for its recovery and reduced venting into theatmosphere.In order to identify the initiatives to be included in themeasurement and pre-feasibility studies that will beconducted during the first quarter of 2013, survey andpreparation visits were made to the facilities of theBarrancabermeja refinery and the Monterrey transportstation.CO 2, CH 4y N 2OTables 33 to 35 show the evolution of emissionsby pollutant type: carbon dioxide (CO 2), methane(CH 4) and nitrous oxide (N 2O).Table 33.Emission of CO 2 in KilotonsScope 2009 2010 2011 2012Direct/Scope 1 5,280 5,091 6,295 6,356Indirect/Scope 2 166 187 209 250Source: Ecopetrol, Vice Presidency of Innovation and TechnologyTable 34.Emission of CH 4 in KilotonsScope 2009 2010 2011 2012Direct/Scope 1 20 21 24 19Indirect/Scope 2 0 0 0 0Source: Ecopetrol, Vice Presidency of Innovation and TechnologyTable 35.Emission of N 2 O, in KilotonsScope 2009 2010 2011 2012Direct/Scope 1 0.06 0.06 0.11 0.11Indirect/Scope 2 0 0 0 0Source: Ecopetrol, Vice Presidency of Innovation and Technology

Environmental dimension187Emissions ofcriteria pollutantsIn 2012, under the continuous improvement processfor the emissions inventory, the IT solution for theAtmospheric Emissions Management System wasdelivered, a process that will enter operation fromJanuary 2013 in each of the areas and with which thefollowing will be done:Display and monthly monitoringof atmospheric emissions fromthe company’s daily or usualoperations.Attainment of standardized indicatorsto enable comparison of atmosphericemissions with other oil companies, inorder to analyze our management.Query and report the emissionsprofile for each business.Table 36.Criteria Pollutant Emissions(Figures in kilotons)Pollutant 2009 2010 2011 2012NOx 16.6 18.5 18.8 19.1Enable the identificationof potential emissionsreduction projects.SOx 15.2 18.3 14.1 13.5CO 253.0 223.5 252.1 226.1MP 4.3 3.8 4.4 2.8VOC 18.7 14.7 73.8 64.3Source: Ecopetrol, Vice Presidency of Innovation and TechnologyTable 36 presents the criteria pollutantemissions generated by the company inthe last four years.

188Environmentalmanagementof solidsWithin the planning to achieve the Mega-targetof one million three hundred thousand cleanbarrels in 2020, another key issue for the companyis to rationalize and optimize the consumptionof materials, manage its waste efficiently andmitigate its impact on the environment.Barrancabermeja Refinery

Environmental dimension189Thus, this section addresses the issues related to the environmentalmanagement of materials used during operations, the disposal ofhazardous and non-hazardous solid waste generated in the differentproduction processes, as well as the process of abandonment,recovery and final delivery of wells in order to understand thetraceability that Ecopetrol exercises on sources and solid supplies,from their origin to their final disposal.MaterialsThe purchase of goods and services nationallyin Ecopetrol is regulated by the procurementmanual, which is available publicly on the followinglink http://www.Ecopetrol.com.co/contenido.aspx?catID=395&conID=39547The company has adopted a Supply Methodologyas a systematic model for the strategic sourcing ofgoods and services required by the organization.The process starts with the planning of these,identifying those that have a high impact on theorganization and a high level of spending.Additionally, there are methodologies for marketbenchmarking, to thus be able to define the bestsupply strategy, leading to better business; it is thenimplemented and monitored in execution.Although Ecopetrol does not quantify the totalweight and volume of materials used due to therange of measurements that this implies,the total amount purchased is quantified aswell as the number of processes, purchasesand contracts through which their supply isensured.In 2012, business was conducted with4,544 contractors for a value of $18,158million, through 16,265 processes: 9,815purchases and 6,450 contracts by means ofwhich 98,923 materials were acquired. Thisrepresents an increase of 16% in comparisonwith 2011, when 82,466 materials wereacquired within 14,870 processes: 8,172purchases and 6,698 contracts.According to cataloging based on UNSPSCcodes, Table 37 describes the purchases madeduring 2009, 2010, 2011 and 2012, taking intoaccount such coding.

Table 37.Purchases according to category (Figures in pesos)Manufacturingcomponents and suppliesFuels, fuel additives, lubricantsand corrosion resistantmaterials2012 2012 2012Systems, equipment andcomponents for distributionand packaging557,238,901,085 148,055,601,619 260,298,574,582204,725,675,020 541,643,129,625 84,857,539,008 52,214,570,586 6,280,068,663 20,637,028,2662010 2011 2010 2011 20102011Machinery for mining,well drillingand accessoriesFurnitureand furnishingsTools andmachinery in general2012 2012 2012126,955,015,707 4,095,969,086 12,427,077,735319,125,261,053 40,792,290,699 16,797,358,979 8,665,639,496 3,972,605,981 66,694,018,7082010 2011 2010 2011 20102011Office equipment,fixtures and suppliesTelecommunicationsand informationtechnology broadcasting2012 2012 201221,117,945,828 93,598,004,370 N/ADrilling servicesfor mining, oil and gas263,490,893,503 9,625,229,304 14,695,217,376 10,093,391,081 5,316,423,893 N/A2010 2011 2010 2011 20102011Chemical productsincluding biochemicalsand industrial gasesManagement services,business and administrativeprofessionals2012 2012 2012Services based onengineering, researchand technology77,370,034,299 N/A 19,587,055,50128,762,900,236 223,315,619,967 61,016,890,740 1,518,528,026 1,895,497,292 N/A2010 2011 2010 2011 20102011Machinery and equipmentfor power generationand distribution2012 2012Laboratory measurement,observation andverification equipment108,458,046,636 42,140,032,11610,686,494,214 790,999,053,051 7,748,46021,178,391,8322010 2011 20102011

Environmental dimension191Supplies, components andelectrical accessoriesand lightingEnvironmental servicesPublished products2012 2012105,019,192,246 22,035,499,3581,483,683,333 16,253,050,191 N/A80,263,609,7242010 2011 201020112012620,129,59489,318,5002010N/A2011Civic Affairs Health services Security services2012 2012 2012N/A 0 30,351,499,29526,376,350 N/A 504,002,771 37,152,600,575 50,267,500 70.0002010 2011 2010 2011 20102011Equipment and supplies fordefense, protectionand securityMedical equipment,accessories and suppliesDirect Charge2012 2012 20125,171,944,271 2,925,078,512 17,823,474,930197,188,109 N/A 242,000 N/A N/A83,082,736,9492010 2011 2010 2011 20102011Transport, storageand mail servicesCleaning equipmentand suppliesOverall total2012 2012 2012N/A 1,081,509,693 $1,656,443,672,772N/A 29,439,746,579 4,721,017,511 3,113,201,6422010 2011 20102011$1,712,366,189,5272011$1,365,862,161,6882010Industrial manufacturingand production servicesEditorial, design, graphicsand fine arts services2012 2012N/A 73,086,31085,637,482 9,936,901,978 156,399,109 2,664,853,852Source: Ecopetrol, Strategic Supply2010 2011 20102011Department

192Green procurementAs of 2011, Ecopetrol incorporated the GreenProcurement Strategy into the company’ssustainability vision and business strategy. Thisstrategy is based on the European Union’s GreenPublic Procurement (GPP), which indicates thatthe company should orient its supply chain(contractors and suppliers) towards having alower environmental impact, while implementingmeasures for its reduction and mitigation forincreased competitiveness.Green contracts 2012$ 928,017millionGreen contracts 2011$ 859,275millionTo this end, it conducted an analysis of the goodsand services with Green Procurement potential,which made it possible to give priority to goods andservices with high environmental and operationalimpact for the organization. In this context, weintroduced the Green Clause in 23 types of mastercontract, requiring better environmental practicesfrom contractors, making it possible to observetheir environmental traceability through specificindicators.At the close of this report, a total of 83 contractshad a Green Clause, representing $ 928,017,000 ofgreen contracts managed, which is 8% higher than2011, when green contracts totaled $ 859,275,000.

Environmental dimension193and contractors, including concepts such aseco-labeling, product life cycle, sustainabledevelopment, carbon footprint and watersustainability, all under the framework of the Eco-Efficiency Forum 2012, held by the company.Draft Bill No. 170 of 2011 continues its regularprocessing in Senate. The rapporteur thereof is Dr.Félix Valera, whose preamble highlights the role thatthe company has had in the field.”Ecopetrol, the largest company in thecountry, and whose shareholding mostlycorresponds to the Colombian State, a fewyears ago began a pilot program for greenprocurement, which today representsan example to be followed by all nationalpublic entities (...).Positioning and disclosureof Green ContractsIn 2012 various activities were conducted in orderto position the issue both among Ecopetrol’scontractors and suppliers, as well as in the nationaland international arena in general.Among these actions, a long-term work planwas structured (2012 - 2016) with suppliersand contractors, including concepts such aseco-labeling, product life cycle, sustainabledevelopment, carbon footprint and watersustainability, all under the framework of the Eco-Efficiency Forum 2012, held by the company.Among these actions, a long-term work planwas structured (2012 - 2016) with suppliersEcopetrol is a pioneer in Colombia in theprocurement of environmentally-friendlyproducts and services, and to that extentshould be an example for the other nationalpublic entities or companies.”Anyone interested in the issue can ask questionsor make suggestions by accessing the webpagehttp://portal.Ecopetrol.com.co/contenido.aspx?catID=422&conID=47840 or by sending anemail to CVerde@Ecopetrol.com.coGoing forward, Ecopetrol will continue to workon incorporating and meeting internationalstandards in the documentation model, theimpact and costing analysis for the introductionof environmental requirements in the life cycleof goods and services, and the creation andmethodology of economic, environmental andsocial impact indicators.

194WasteIn 2012 the generation of hazardous andnon-hazardous waste was 205,018 tons,compared to 129,987.1 tons in 2011,representing an increase of 58%.Total waste (tons)Hazardous waste205,018.0 95,555.42012 2012129,987.1 36,958.142011 2011169,613.7 52,118.72010 2010Source: Ecopetrol, Strategic Supply DepartmentTable 38.Generation of solid waste (tons)Source: Ecopetrol, Strategic Supply DepartmentNon-hazardous wasteThe generation of non-hazardous waste was18% higher compared to 2011. Of this total,21% is managed through utilization (recycling,reuse) and the remaining 76% is taken to alandfill or dump.The production and transportation areasgenerate significant volumes of metal waste anddebris, making these nonhazardous wastes themost representative of these areas.Drilling sludge and wasteThe cuttings generated during drilling are carriedby the flow line to the sand traps where part ofthe fluid and the resulting solids from the drillingare separated. Solids from the catch tanks aretaken to the centrifugation process to reducemoisture by removing the fluids still present.The solid waste from centrifugation is transferredto the disposal area or pools, where it is mixed

Environmental dimension195Non-hazardous waste109,462.5201293,028.962011117,494.82010Source: Ecopetrol, Strategic Supply DepartmentThe increase in the generationof waste is mainly due tonon-hazardous waste, due tothe change in frequency ofmaintenance activities and theinclusion, for the first time, ofdehydrated sludge generatedby refining treatment plants(see Table 38).with material that reduces the water contentand native soil. This mixture is homogenizedwith the aid of mechanical equipment, in orderto then perform the compaction thereof.Figure 32.Total drill cuttings 2012600000During this process, retort testing is conductedto verify moisture and dispose of thismaterial to be reformed during the location’senvironmental recovery phase.5000040000503,074342,643 338,131Figure 32 shows the number of cuttings (sludgeand waste derived from drilling) for 2012.3000020000The volume of wet cuttings, i.e. with moisturegreater than 60%, produced in 2012 was503,074 barrels (Bbl), while those subjectto treatment, i.e. centrifuged and mixedwith environmentally-friendly drying andstabilization agents, obtained a volume of342,643 Bbl. At year-end 2012, 338,131 Bbl hadbeen disposed of.100000CuttingsGeneratedCuttingsUnloadedCuttingsDisposed OfSource: Ecopetrol, Executive Vice Presidency of Exploration and Production

196Mandalay, an examplein waste managementWithin the Coveñas oil terminal is Mandalay, amanagement center where all the operation’s waste ismade use of, generating environmental benefits.During the first years of the nineties the port ofCoveñas, Colombia’s main oil terminal, had a historicguest. It was the FSU (Floating Stationary Unit), asteel giant that Ecopetrol had hired to streamlinecrude export operations to international tankersduring a time when the shipments had grownbecause of the production bonanza in the Cusianaand Caño Limón fields.As part of its operation, the FSU generated largevolumes of industrial, domestic and hazardous wastein the Gulf of Morrosquillo region. In the early years,Ecopetrol made sure that the waste was depositedin the landfills of the nearby town, Tolú, and in that ofChochón in the city of Sincelejo.Nevertheless, as this waste was difficult to handle,there were complaints from environmentalauthorities. To provide a fundamental solution to theissue, Ecopetrol made a nearby lot available to sortthe waste and perform separation at the source.Thus was born the Mandalay Waste ManagementCentre, 10 hectares in size, located in the jurisdictionof the Coveñas terminal. “Here, all hazardous waste,domestic waste and process lines are handledand processed. The idea behind Mandalay is thatthere’s no waste that’s not useful. It always has ause in the production process,” explained FernandoDelgado, Ecopetrol’s integrated risk managementprofessional, in Coveñas.

Environmental dimension197Good practiceIn Mandalay, waste is separated according totype: organics, to be used to generate compost;recyclables, such as paper, plastics, glass,cardboard and metal; industrial, such as solid oilywaste, and deposits, which are left over from thecleaning of tanks and used for biodegradation.In 1998 the construction required by the projectwas completed: a biodegradation strip and threetemporary oily water storage pools. These facilitiesoccupy 1.8 hectares and the remaining 8.2 hectarescorrespond to the forest protection area wherenative forest grows.The pools meet a requirement of the InternationalMaritime Organization (IMO), as due to Coveñasbeing an international oil port, it must have specialsites to receive oily water and leachate pools exitingthe biodegradation strip.“We’ve learned a lot from recycling. Firstly, all theoily material is treated and used on fertilizableground that serves to fertilize forest areas.Moreover, what’s produced from the biodegradationstrip is focused on the recovery of timberland ormeadows. It’s normally requested by Marines forthe creation of retaining walls or meadow areas,”says Delgado.A landfill cell was also created, protected bygeomembrane, which specializes in the creation ofcompost. Deposited here, for its decomposition, ispruning material, food waste and deposits resultingfrom the cleaning of storage tanks. This compostmaterial is dedicated to plantations.In this sense, the Mandalay project has had such animpact in the region that some schools in the areaask for a lot of compost for the cultivation andproduction of plantations. “From the momentcompost started being produced in Mandalay, noother fertilizer was purchased, and all the gardensin this area are fertilized with our compostbecause it is a great fertilizer without sideeffects,” he adds.One of the most recent challenges in Mandalaywas coal tar; the material that is used to coat thepiping of oil pipelines and poliducts. This wastebegan to be stored in large quantities and aproductive use for it was not found because, dueto its hardness, no degradation process could becarried out on it.Taking advantage of his passion for knowledge,Delgado discovered that this tar can be used forairport runways and in clinker-producing kilns.Therefore, in 2011 an agreement was signed withthe Holcim cement company, which removes thetar from Mandalay and gives it a productive use asan alternative fuel or co-processed material, suchthat it becomes an alternative energy source thatdoes not produce polluting emissions.Mandalay also represents an importanteconomic component, as it is operated by acontractor of Ecopetrol, and it sells the recycledproducts. “We try to generate maximumprofit and to that end, recyclables are sortedin detail, which allows for a better sale price,”says Juan Carlos Garcés, representative of thecompany of the same name that is in chargeof that operation. In order to keep up-to-dateon the issue, Garcés and his staff undergo ​regular training at Universidad de Córdoba andEcopetrol’s Colombian Petroleum Institute.

198Hazardous wasteIn terms of volumes of hazardous wastegenerated, the production area is that whichgenerates the greatest volume of waste. Thevolumes are represented by: Oiled items such asrags, cloths, rags, gloves, paper, absorbents, filtercartridges, etc., clays, sands, oil impregnatedcatalysts, tank sludges, ceramic balls (ceramicmaterial , catalysts or other toxic substances),and waste resulting from the production orprocessing of petroleum and asphalt.Table 39.Management of hazardous solid waste(Figures in kilos)Utilization(recycling, regeneration,direct reuse)Treatment(Incineration, bioremediation,advanced technologies)Disposal(Security landfill)10,857,994 99,338,696 17,288,7322012 2012 201213,037,411 218,038,844 5,547,6132011 2011 2011472,537 97,745,318 772,8102010 2010 2010Source: Ecopetrol, Vice Presidency of HSE and Operational SustainabilityNote: The data reported here corresponds to the internal work carried outby Ecopetrol as a generator and through third parties for the management ofhazardous waste, following the provisions of Decree 4741 of 2005.The generation of this waste saw a significantincrease from 2011 to 2012 due to the increasein the activities that generate such waste andmaintenance frequencies, as well as the increasein contingencies and attacks that occurredduring the year.Through the work done with third-parties, about36% of the hazardous waste was treated throughbioremediation and incineration. Additionally, 11%of the hazardous waste generated was exploitedthrough reuse or direct recycling (see Table xx).

Environmental dimension199Advances in Reverse LogisticsIn 2012, Ecopetrol continued to develop strategies to optimize the disposal of materialsand assets not required for the company’s operation and the use of these by others, ina manner consistent with the legal system, obtaining economic benefits and generatingsustainable development, mitigating environmental impact or generating social welfarewith potential benefits in corporate reputation (see Table 40).Table 40.Disposal ofmaterials andassets notrequired forthe operationIncome from sale of assetsand materials not requiredfor Ecopetrol S.A.’s operation(movable property andwaste)Oily wastedispatchedSale of powertransformers withPCB oils

200Abandonment,recovery andfinal delivery of wellsAs a company committed to producing cleanbarrels, in 2000 Ecopetrol began creating protocolsto address the dismantling of facilities and theclosing of wells that turned out to be dry or thathave ceased operations.The main risks involved if the formal abandonmentof these reservoirs is not carried out, are accidentsto people entering the premises without beingaware of their characteristics, and the use of thelands by owners other than the company, whochoose to use these for agricultural activitiesrequiring land without native flora, deterioratingColombia’s rich biodiversity.The process consists of three components:1Well physicalabandonmentPhysicalabandonment ofthe well, by sealingit with cement andthe placement of asignpost marking theclosure to preventaccidents to people.2DismantlingDismantling offacilities, whethersurface units, flowlines, roads, powertransmissionlines, workshops,warehouses, officesor other facilities.3EnvironmentalRestorationEnvironmental restoration,which in turn includeswaste management,erosion stabilization andcontrol, and revegetation,reforestation or grasslandrestoration, in orderto restore the originalconditions of the affectedsite.Surface unitsWorkshops,Warehouses, OfficesFacilitiesPowerLines1. Waste Management2. Erosion stabilization and control3. Revegetation, reforestation andgrassland restorationFlow LinesRoads

Environmental dimension201The current legislation in this area dates from 2009,when the Ministry of Mines and Energy issuedResolution No. 181495, which is supplementedby Decree 2810 of 2010. This regulation made itpossible to sign a Memorandum of Agreement withthe Ministry, in which Ecopetrol pledged to close theaccumulated inactive wells between that date and2014, which in 2011 totaled 1,900 wells.Figure 33.Historical behavior – Well abandonment400350300Direct OperationJoint OperationTotal3404437057The abandonment activities began in 2007, andhave been increasing thanks to the monitoring ofinactive wells in the different fields under directand joint operation.Figure 33 shows the historicalbehavior of the physical abandonment of wells.From 2012 onwards, there is more comprehensiveinformation that makes it possible to distinguishbetween the wells that have been abandoned,those in which facilities have been dismantledand sites where environmental restoration hasbeen completed, i.e., which have completed theabandonment cycle.25020420026156150112296 3132210017850 29112 134290200720082009201020112012Source: Ecopetrol, Executive Vice Presidency of Exploration and ProductionIn this regard, in 2012 under direct and jointoperation, the physical abandonment of 370 wellswas carried out, as well as the dismantling of 668facilities and the environmental restoration of 137sites (see Table 41).Table 41.Complete abandonment cycle 2012PhysicalAbandonmentDismantlingEnvironmentalrestorationDirectoperationJointoperation313 632 13657 32 1Total 370 668 137Source: Ecopetrol, Executive Vice Presidency of Exploration and Production

202In 2012, 668 dismantling activities wereperformed, of which 632 corresponded todirect operation and 36 to joint operationPhysicalabandonment of wellsPhysical abandonment is considered to be thetechnical sealing of wells. In 2012, 370 wellswere abandoned. Figure 34 details the wells byDepartment.Figure 34.Number of wells abandoned, by Department14127 136300Teca FieldMagdalena MedioSouthern RegionCatatumboEastern RegionMinor FieldsNortheastern RegionSource: Ecopetrol, Executive Vice Presidency of Exploration and Production

Environmental dimension203Dismantlingof facilitiesThe dismantling of facilities is considered tobe those activities aimed at decommissioningflow lines, electrical systems and civil worksassociated with the wells and, specifically,process plants are taken out of operation.In 2012, 668 dismantling activities wereperformed, of which 632 corresponded todirect operation and 36 to joint operation (seeFigure 35).EnvironmentalrestorationEnvironmental restoration is performed for theareas corresponding to the abandoned welland dismantled facilities.In 2012, 137 environmental restorationactivities were performed, of which 136corresponded to direct operation and 1 to jointoperation.Figure 36 shows the number of restorations byDepartment.Figure 35.Number of dismantling activitiesFigure 36.Number of environmental restorations, by Department9331 1355 154396Magdalena MedioCatatumboMagdalena MedioCatatumboSouthern RegionCentral RegionSouthern RegionCentral RegionSource: Ecopetrol, Executive Vice Presidency of Exploration and ProductionSource: Ecopetrol, Executive Vice Presidency of Exploration and Production

204EmergencymanagementIn emergency management new corporate guidelines onemergency planning and response are being implemented.These new guidelines incorporate management assurancemeasures for preparedness, response and recovery activitiesfor possible emergencies.Barrancabermeja Refinery

Environmental dimension205Starting from the businesses, a leadership system has been establishedthrough a management control structure, from where the process ofimplementing these new management measures is organized.This process incorporates the monitoring of the management indicatorsfor the businesses and the areas responsible for keeping the emergencyplans up-to-date and operational.PlanningIn order to establish the needs in developingand updating emergency plans, a baselinehas been defined that gathers informationfrom industrial and non-industrial facilities,personnel responsible for the implementation ofthe emergency plans for existing facilities, andexisting equipment for emergency response.With this information, a continuously updatedinformation record is kept regarding theemergency plans, facilities included andpersonnel involved, based on which records arekept on areas requiring the implementation ofplans, as well as personnel that require trainingon emergency issues, thus strengtheningthe target population of the emergency plansimplementation process.During 2012, with the participation ofthe businesses, a verification processwas performed on the needs in existingemergency plans, which generated updateneeds in accordance with the new corporaterequirements. This led to the establishment ofmass update processes for emergency plans,which were initiated during the year as pilots.EmergencyCommand SystemAmong the planning measures, a newemergency response model was discussed,called the Emergency Command System, whichinvolves designing a response scheme thatoptimizes resources, response times and themanagement of critical scenarios.With this new model, which completed itsconceptual and design stage, a unique actionFirst National Meeting of Ecopetrol S.A.Brigades, October 2012framework has been created for Ecopetrol,which establishes limits and responsibilities inthe areas of business continuity, emergencymanagement and non-operating incidentresponse, and at the same time, issues havebeen managed in relation to training, acquiringnew resources and the standardization of a newresponse model.PersonnelGiven the new corporate requirements, a trainingrequirements matrix has been developed forpersons in charge, leaders and staff involved inemergency response in the areas.Considering these requirements, the content oftraining programs was defined and staff fromthe businesses that are involved in emergencyresponse were given the opportunity toexperience the first training programs alignedto these new requirements, including trainingon the incident command system, rescue andmedical care, spill control and fire control.

206Also, in order to identify new training needs,the First National Meeting of Ecopetrol S.A.Brigades was carried out, with the participationof all businesses, through which it was possibleto achieve the strengthening, and in part, theconfirmation of the training needs of emergencyresponse personnel in the company.Practical drillswhere themethodologyof the IncidentCommand Systemis applied.EquipmentIn designing the newemergency responsemodel, the acquisition ofthe resources necessary foremergency managementin the new responsebases is considered,while the businesseshave strengthened theirequipment inventories,consistent with activities’growth measures.ImplementationIn order to keep better control of the preparationprocess for emergency response and riskreduction, in 2012 the monitoring of a unifiedtraining program was established, which isimplemented according to the needs of eachbusiness.The monitoring of this preparation process,which begins with the development control ofdrills and closes with the register of findingsin the fire protection system, has been able toconsolidate an implementation managementprocess in the areas. Thus, control has beenkept in the execution of 300 drills in operationaland administrative areas, whose fulfillment isreflected in the emergency planning and responseindicators defined for the year.In order to strengthen emergency preparednessin response to the growth process in theproduction, processing, transportation anddistribution of hydrocarbons, in 2013, followingtargets plan established to 2020, the programswill continue undertaking activities in order tolook after the different stakeholders involved inEcopetrol’s activities.Annual meeting of expertsAt the Annual Meeting of Experts (RANE forits acronym in Spanish), the new regulatoryframework for disaster risk management inColombia was analyzed, as well as the regulatoryprocess of the new reference framework in theareas of emergency response responsibilities,risk management in communities , informationmanagement for hazards and emergencyplanning, risk assessment needs and emergencymanagement.The meeting was promoted by Ecopetrol andled by the national disaster risk managementauthority, an entity that is responsible for theformulation of the new national plan for disasterrisk management, as well as for regulating thenational risk management plan.

Environmental dimension207Environmental incidentsdue to operational causesIn 2012 there were 27 environmental incidents dueto operational causes, less than the maximumallowable limit set in the company’s targets of 31incidents for 2012.This result represents the fulfillment ofthe target at 13% below the limit, and animprovement of 34% in the frequency ofenvironmental incidents compared to 2011,year in which there were 41 incidents, which ismainly due to the results of operational integrityprograms that were implemented in certainareas of the company (see Figure 37).Barrels spilled attributable to environmentalincidents due to operational causes, totaled4,050 (see Figure 38). It was not possible tostay within the limit for 2012 of 710 barrels,mainly due to a fuel spill that occurred in theGalán Sebastopol Pipeline, which amounted to3,323 barrels.Figure 37.Total number of environmental incidentsFigure 38.Volume of barrels spilled *170753311288595611646942482510825994050414127200420052006200720082009201020112012200720082009201020112012Source: Ecopetrol, Vice Presidency of Transport and Logistics(*) Barrels Spilled: corresponds to the barrels that went onto the BMS due tooperational causes. For 2012, oil and oil product spills greater than one barrelthat affect the environment are accounted for.Source: Ecopetrol, Vice Presidency of Transport and Logistics

208Causes identifiedThe main causes identified for environmentalincidents that occurred in 2012 can be groupedinto operational failures, failures in the pipelineintegrity program and tank truck road accidents.Cause 1Operational failures weredue to lack of change controlassurance in respect ofcurrent operating conditions,inadequate procedures inthe operation and breachesin procedures, operation andsupervision.Reduction infrequency and severityThe actions planned to reducethe frequency and severity ofenvironmental incidents are:Cause 2Failures in the pipelineintegrity program were dueto untimely interventionin the integrity program’sconditions, failure toidentify critical lines withinthe program and delays inimplementation.Updating the Pipeline IntegrityAnalyses requiring this, taking intoaccount current and projectedoperating conditions, theinfluence of third-party actions,environmental, climatic andgeotechnical conditions, adjustingthe estimated useful life ofpipelines.Adjusting integrityplans for timelyintervention, in relationto estimated useful life,ensuring the allocationof resources required.Cause 3Tank truck road accidentsarose due to limitedsupervision and assurance ofdriver competence, as well asinadequate performance indriving tank trucks.

Environmental dimension209Carrying outawareness raisingin liquid cargotransport.Developingand ensuringimplementation ofoperational proceduresidentified as criticalfor the PipelineDepartment.Systematic monitoringof pipeline integrityprograms in theProduction andTransport VicePresidencies.Updating and completingthe inventory ofequipment andcritical elements fortheir inclusion in themaintenance program.Undertakingthe Road SafetyProgram basedon values ​andbehaviors.

210Seizure ofhydrocarbonsDuring 2012, Ecopetrol transported 1,218 Kbod ofhydrocarbons, of which 916 were crudes and 303were refined products (see Figure 39).Figure 39.Volumes transported of refined products and crudesAnnual average in KbodCrudesRefined Products1,204.5 1,218.9Various reasons, particularly the lack ofknowledge on the part of the public about thesocial, environmental and economic impactgenerated by the illegal seizure of hydrocarbons,has kept crudes theft alive, particularly in thedepartments of Putumayo and Nariño, affectingEcopetrol’s value chain.751.8799.5710.4194209223517 542 5761,035.8265771289 303916 916Theft of refined productsThrough various initiatives, the effectivenessof the strategy and teamwork, over 10 years adecrease of 3,050% has been achieved in theseizure of refined products: from 7,270 barrelsper calendar day (BPCD) in 2002 to 23.9 BPCDin 2012 (see Figure 40).20072008200920102011Source: Ecopetrol, Vice Presidency of Transport and Logistics2012This significant progress in controlling hydrocarbonseizure levels, both crudes and refined products,was recognized in 2012 with the AccentureInnovation Award.Figure 40.Theft of hydrocarbons (BPCD)Refined ProductsCrudes2003200420052006200720082009201020112012Total lossRefined 5,777 2,942 1,601 942 561 389 196 132 81 23.9Crudes 358 66 28 32 2 161 189 369 419 413Source: Ecopetrol, Vice Presidency of Transport and Logistics

Environmental dimension211Attacks againstthe infrastructureDuring 2012, 109 attacks on oil pipelines were perpetrated,of which 45 affected the Caño Limón-Coveñas Pipeline and64 affected the Southern Pipelines.As a result of the efforts made in detectingillegal valves, the development and maturationof technologies, joint work with security forcesand the support of state agencies in ensuring theprosecution process, the seizure of refined productsin 2012 compared to 2011, experienced a reductionof 70%, going from 81 BPCD to 23.9 BPCD.Theft of crudesRegarding the seizure of crude, the results in2012 show a decrease of six BPCD compared to2011, going from 419 to 413 BPCD in 2012 (seeFigure 40).Although the country’s southern region presentsspecific conditions that hinder the attainmentof better results, the company continues tostrengthen ties in the community, strengtheningrelations with security forces, and constantlytraining justice officials and staff themselves.The increase in attacks in 2012 compared to 2011 was131%, going from 83 to 109 attacks (see Table 42).Table 42.Attacks on the oil infrastructureYear201020112012SystensNumberattacksSouthern Systems 32Caño Limón – Coveñas 13Southern Systems 51Caño Limón – Coveñas 32Southern Systems 64Caño Limón – Coveñas 45Source: Ecopetrol, Vice Presidency of Transport and LogisticsTotalattacks4583109Cabe resaltar que aunque se han incrementadolos ataques, se ha logrado disminuir los tiemposde reparación a los oleoductos, minimizando losimpactos en la operación.Attack mitigationIn order to mitigate the attacks on infrastructure,Ecopetrol structured a comprehensivesecurity strategy that focuses on ensuring thecontinuity of the organization’s operations andprojects, through the protection of people andinfrastructure, framed within the VoluntaryPrinciples on Security and Human Rights.This strategy is carried out through theimplementation of preventive, deterrent andreactive actions, where most of our actions arefocused on prevention and having responsecapability.

212Gerenciamientoambiental del aguaIn 2011, the following study was conducted: “Analysis of conflictand critical zones in Ecopetrol S.A. operating areas as an inputto the management of water-related risks“, through whichit was possible to estimate water withdrawals, dischargesand conflicts with stakeholders in areas where the operationis under pressure criticality criteria due to use, impact andits relationship with the vulnerability of the country’s waterresources.Ciénaga Paredes, SantanderThe results are being disseminated in the organization andare part of the setting of the Comprehensive managementguideline for water resources in Ecopetrol, which will becreated internally with the various stakeholders and willestablish action plans for implementation in 2013.

Environmental dimension213Polar ExerciseEcopetrol annually conducts a planning andanalysis exercise called Polar, whose objectiveis to validate and ensure the development of theGrowth Strategy through a viable and sustainableoption in operational, infrastructure, commercialand financial terms for Ecopetrol and its CorporateGroup.Within the 2012 Polar exercise, Ecopetrol identifiedwater management as a critical variable for theachievement of the strategy, which is why itstructured an interdisciplinary working groupcalled Water Polar in order to generate a viable andoptimal strategy for water management, includingbest practices and complying with environmentaland regulatory standards.The team analyzed the environment, risks andopportunities associated with water resourcesaccording to various growth scenarios andconstructed the first diagnostic on the state ofwater management for the Corporate Group, andsucceeded in identifying possible future scenariosfor water management, its associated risksand potential management gaps that would benecessary to act on to ensure the expected growth.The main results of the work donein 2012 are:Assessment of potentialmanagement scenariosassociated with highvolumes of waterextraction associated withproduction, new disposalrestrictions and stricterdischarge parameters.Creation of curves forwater associated withproduction for the years2012, 2015 and 2020according to the availableinformation.Operational, socialand environmentaldiagnostic of currentwater management in theCorporate Group’s mainproduction fields.Identification of themain gaps in watermanagement, accordingto the scenarios analyzed.Identification of Paretofields, according tocurrent and futurescenarios of oilproduction andassociated water, and theneed to define a suitabletreatment or disposalalternative for these.Preliminary evaluation ofthe different managementand disposal optionsavailable for the Paretofields and their associatedcosts.

214Water management planFollowing the results of the Water Polar group’swork, the Water Management Plan was structured,which seeks to ensure the management of waterassociated with crude in Ecopetrol and establishesthe following lines of action:Production waterdisposal alternativesThrough this line, there will be an assessmentof reinjection alternatives for enhancedrecovery, reinjection for disposal, discharge tosurface water bodies and irrigation in each ofthe Pareto fields.Utilization opportunitySeeks to evaluate the potential reuse ofpreviously treated produced water for use inagroindustrial projects or even domestic usein the areas of influence.Control at the sourceThis line studies the different technologies or processesrequired for the decrease in the percentage of water extractedwith the oil produced.These include the application of chemicals that reduce waterextraction rates, the implementation of ICD equipment (InflowControl Devices) or DHOW equipment (Downhole Oil / WaterSeparators) and reservoir management through definingoptimal extraction rates that reduce associated water cuts.In 2013, an action plan will beestablished to be carried outin each of the above lines withits corresponding scheduleof activities, with the aim ofensuring the implementation ofan appropriate strategy for watermanagement in accordancewith the production scenariosevaluated.Withdrawal minimizationEvaluates all opportunities forinternal reuse of produced water inthe operating processes of the areasproducing it.

Environmental dimension215Water withdrawalIn 2012 Ecopetrol withdrew a total of 55.76 million m3 from 217water sources. The volume withdrawn from different sources saw adecrease in comparison with the previous year, mainly due to reuseactivities performed in the operating areas, with surface water andgroundwater being the most used (see Table 43).Table 43.Volume of water withdrawn by source (in m 3 )Year Surface Groundwater Aqueduct Other Total2009 73,609,302.2 7,129,578 4,444,072 11,079 85,194,031.22010 77,824,827 4,680,954 4,337,928 86,843,7092011 38,655,099 15,981,820 5,754,187 66,134,1912012 37,978,734 13,303,704 4,478,102 55,760,540Source: Ecopetrol, Vice Presidency of HSE and Operational SustainabilityThe value of water withdrawn in 2012 represents adecrease of 15% compared to what was withdrawnin 2011 (see Figure 41).The number of withdrawal sources for 2012compared to those reported in previous yearshas increased due to eight new withdrawalsources recorded by project departments andnew operating areas. However, this increase in thenumber of sources does not affect the volumewithdrawn due to the savings and reuse activitiesbeing implemented in the different areas.Figure 41.Number of withdrawal sources by typeNo. of Source10080604070722387 8867359273 7648 49SurfaceGroundwaterAqueductOtherFormationwater volumeWater production in 2012was 7.7 million barrels ofwater per day, equivalentto 9.2 barrels of waterper barrel of oil.20220092010201120120Source: Ecopetrol, Vice Presidency of HSE and Operational Sustainability

216Recycling of waterused in processesIn 2012 Ecopetrol reused 15 million m3, mainly due to the wateruse and savings activities carried out ​by the two refineries, whichrepresented 55% of the total water withdrawn in these areas.Initiatives for efficientwater use and savingsIn 2012 there was a reduction in the use of waterin the Barrancabermeja refinery, mainly due tothe reuse of backwash water, sour water andcondensate.In the Cartagena Refinery there was 6% reuse ofthe total withdrawals by the two refineries throughrecirculation in the wastewater treatment plant’ssand filters.Water ReinjectionThe water treatment and reinjection plant inthe Llanito Field (Llanos Orientales) came intooperation, which has the capacity to treat 3,000barrels of water per day, which contributes to thereduction of discharges from this area, takingadvantage of it in the formation reinjection process.Quantity of producedwater reinjected(Million m 3 )168.5201274.432011272010Source: Ecopetrol, Vice Presidency ofHSE and Operational SustainabilityIn 2012, 168.5 million m3 were reinjected for thepurposes of secondary oil production (enhancedoil recovery type reinjection) or disposal typereinjection. This corresponds to an increase of126% compared to that reinjected in the previousyear, which is due not only to reporting fromthe new operating areas, but also the programsestablished to increase the volume of waterreinjected (see Table 44).Pink Dolphin (Tonina), in theregion of the Colombian Orinoco

Environmental dimension217DischargesWastewater discharge in 2012 was 100.19 millionm3, which represents a 26% increase in the volumedischarged (see Table 45). This increase is mainlydue to the entry into direct operation of fieldswhose partnership contracts ended.Table 45.Wastewater dischargeVolume discharged (million m 3 )DischargetypeDomesticwastewaterIndustrialwastewater2009 2010 2011 20120.39 0.76 1.02 0.6787.89 72.9 72.92 82.24Other * 0.19 0.06 0.07Total 88.28 73.85 73.98 82.98*Other: Spray and infiltration.Source: Ecopetrol, Vice Presidency of HSE and Operational SustainabilityThe number of discharges by destination, just aswith the volume discharged, saw an increase withrespect to that reported in the previous year (seeTable 46).The increase in the volume discharged arose dueto the entry into operation of the Minor FieldsDepartment’s reverted fields, in 2012.Table 46.Discharges by destination (m 3 )Year Surface Sewer system Other Total2009 310 12 59 3812010 199 22 98 3192011 176 14 178 3682012 216 28 181 425Source: Ecopetrol, Vice Presidency of HSE and Operational Sustainability

218BiodiversityAlong with its ethnic and cultural diversity, Colombia stands outon the world stage due to the diversity of its flora and fauna, atreasure that must be respected, maintained and promoted byEcopetrol and all those who make up its sphere of influence, inparticular the companies belonging to the corporate group, aswell as partners, suppliers and contractors that operate in thecompany’s facilities.Puma, Casanare

Environmental dimension219In this regard, the company has established clearguidelines for the conservation of biodiversityboth in its areas of operation and in those inwhich, through partnerships with third parties, itcan have a positive impact on both continentaland offshore biodiversity.EnvironmentalManagement Plansfor managing impactson biodiversityOne of Ecopetrol’s mechanisms for assessing riskson biodiversity and measuring the effectiveness ofthe actions taken to prevent its loss, is the annualreview and update process for EnvironmentalManagement Plans in their biodiversitycomponent.This process applies to all operations and projects,and in accordance with its results, their scopeis amended, which makes it possible for actionstaken to be consistent with the reality of theenvironment.Pilot BiodiversityAction Plans (BAP)In order to generate guidelines for themanagement of biodiversity in Ecopetrol’soperational and project areas, with the support ofthe ICP, two Biodiversity Action Plans (BAP) werecreated for the Vasconia and Sevastopol plants.The pilot was created with secondary and primaryinformation from the study area and was adjustedtaking into account the realities of the companyand our operations.The carrying out of these pilots will make it possibleto establish the appropriateness of developingBAP in Ecopetrol’s operations, and eventuallystandardize a methodology for the creation of BAPin the company.Progress in theidentification ofimpacts on BiodiversityThe ICP worked on the development of aFragmentation Index from land use for the CastillaChichimene Superintendence.To this end, it carried out a temporal and spatial analysisbetween 1988 and 2011, identifying land uses in theCubarral Block, and various ecosystems were definedfor conservation and the exercise of eco-functionalconnectivity by the degree of complementarity.Similarly, land use was defined in the Block thathas most impacted or fragmented the originalecosystem, finding that agricultural activities havegenerated greater impact on the region than thoseof hydrocarbon operation.The methodology for the calculation of this Indexis being standardized, and will be delivered as atechnological product by the ICP during the courseof 2013.

220Biodiversity actionsfor offshore projectsThe ICP continues to develop projects aimedat defining strategies and methods for themeasurement of a biodiversity baseline in offshoreareas, whose results will be delivered in 2013.In 2012 two marine voyages were made to carryout characterizations of marine ecosystems usingacoustic methods and taking biotic samples sessileorganisms, plankton and nekton (fish), makingit possible to determine the location of theseaggregations and characterize them.This study seeks accurate technical information onmarine species found in Ecopetrol blocks or areasof interest for the company’s future productiondevelopment, and which is required to preventirreversible impacts on this valuable biodiversity.Conservationof BiodiversityIn 2012, Phase 2 began of the EnvironmentalPlanning for Biodiversity Conservation projectwith the Humboldt Institute, an initiative that wasdeveloped during 2009 and 2010 in the regionsof Magdalena Medio and Llanos Orientales, withthe aim of identifying objects of conservation andgenerating guidelines for the management thereofat a scale of 1:100,000 and 1:25,000.The new phase will continue focusing on theconservation of species and ecosystems, and inthe next three years will cover other regions of thecountry over which Ecopetrol has an impact, asshown in the map below.Ecopetrol - Humboldt project phases

Environmental dimension221Western Andes and OrinocoIn 2013 the first results of the project correspondingto the Western Andes and Orinoco Region will bepublished. For this phase, 26 million hectares ofcontinental territory were evaluated at 1:100,000scale, equivalent to 23% of the country.In a preliminary manner, 9,986,992 hectares wereidentified as priorities for biodiversity conservation,of which 37% are already protected areas, listed onthe Single National Register.To obtain these results, existing mappinginformation was used, the cross-referencing of 11portfolios of conservation priorities in the studyarea was performed, and distribution models forspecies of mammals, fish and plants were used.The selection of windows at 1:25,000 for the fieldphase and collection of primary information was madetaking into account this prioritization, as well as theopinion of experts that give environmental viability tohydrocarbon projects in the study area.In the aforementioned territory, the risk of loss ofbiodiversity at 1:100,000 scale is assessed, basedon criteria of threat (transformation, introduction ofalien species and global change) and vulnerability(size, shape and uniqueness) for the definition ofthe conservation targets for the 63 units of analysisinvolved in the study.The results of eco-regional planning at 1:100,000scale, determine conservation processes accordingto the map below, which identifies conservation in2,035,235 hectares, restoration in 1,601,600 hectaresand sustainable use in 6,350,157 hectares.Signs of biodiversity management in Catatumbo - Orinoco

222ThreatenedspeciesAccording to biological records, in the country 108 speciesof national flora and fauna fall within ranges with highlevels of threat, according to the listings of national andinternational red books.Table 47.Threatened speciesGlobal IUCN CategoryNational CategoryAcanthaceaePelecostemontrianae N/A CRAmaryllidaceaeCaliphruriahartwegiana N/A CRAraliaceaeHydrocotyle andina N/A CRArecaceaeAiphanesgraminifolia N/A CRCeroxylonsasaimae CR CRAsteraceaeEspeletiaannemariana N/A CREspeletiadugandii N/A CREspeletiaoswaldiana N/A CREspeletiapaipana N/A CREspeletiaroberti N/A CREspeletiopsisinsignis N/A CRLibanothamnusoccultus N/A CRMonticaliaalmorzana N/A CRSeneciocarbonellii N/A CRBrassicaceaeDraba arauquensis N/A CRDraba barclayana N/A CRDraba litamo N/A CRBromeliaceaeBromelianidus-puellae N/A CRBromeliatrianae N/A CRGreigiaocellataCR N/APitcairniagrubbiana N/A CRPitcairniaheerdae N/A CRPitcairniajohannis N/A CRPitcairniapetraea N/A CRPuya barkleyana N/A CRPuya boyacana N/A CRPuya cleefii N/A CRPuya gargantae N/A CRPuya horrida N/A CRTillandsiachartacea N/A CRTillandsiafassettii N/A CRTillandsiaracinae N/A CRBrunelliaceaeBrunelliaracemifera VU CRCactaceaeMelocactusguanensis N/A CRChrysobalanaceaeHirtellamaguirei N/A CRParinariparvifolia N/A CR

Table 47 references 62 species of flora, two mammals, fouramphibians, three birds and two reptiles found in the criticallyendangered category (CR) and those that are threatened arelisted (EN, Endangered), identified according to the categoriesestablished by the IUCN and national lists.DichapetalaceaeTapurabullataN/A CRLamiaceaeSalvia pamplonitana N/A CRSalvia sórdida N/A CRSalvia sphacelioides N/A CRScutellariaparrae N/A CRLauraceaeAnibaperutilis N/A CRLecythidaceaeCarinianapyriformis N/A CRGustavia latifolia CR CRGustavialongifuniculata CR ENMagnoliaceaeMagnolia cararensis EN CRMagnolia cespedesii CR CRMagnolia chimantensis N/A CRMagnolia virolinensis N/A CRMelastomataceaeBlakeagranatensis CR N/AMeliaceaeSwieteniamacrophylla N/A CROrchidaceaeMasdevalliaignea N/A CRRestrepiaaspasicensis N/A CRRestrepiapandurata N/A CRPassifloraceaePassiflorapamplonensis N/A CRRosaceaePrunuscarolinae CR N/APrunusernestii CR N/AZamiaceaeZamiaencephalartoides VU CRAriidaeNotariusbonillai (Miles, 1945) EN ENPimelodidaePseudoplatystomamagdaleniatumBuitrago-Suárez y Burr, 2007 CRProchilodontidaeIchthyoelephaslongirostris(Steindachner 1879)ENTrichomycteridaeRhizosomichthystotae (Miles, 1942) EXEXIn late 2012, in Vienna, Austria,the Global South-SouthDevelopment (GSSD) ExhibitionFair was held, at which thebiodiversity conservation projectin Ecopetrol’s operating areas, inassociation with the HumboldtInstitute, was recognized as asuccessful process, which inaddition to achieving synergiesbetween the research andproduction sectors for generatinginformation for decision-makingat the national and regionallevels, can be replicated in othercountries.On that occasion, a call wasmade to promote alternativesin the context of energy andclimate change, focusing on thebiodiversity, forests and landdegradation, an issue in whichthis project is framed.

224Global IUCN CategoryNational CategoryMammalsAteles hybridus CR CRLagothrixlugens VU CRAmphibiansAllobatesjuanii N/A CRAtelopusminutulus N/A CRAtelopusmonohernandezi N/A CRCryptobatrachusnicefori CR CRBirdsCrax Alberti CR CRThryothorusnicefori CR CRPterodromaphaeopygia N/A CRReptilesCrocodylusintermedius CR CRPodocnemisexpansa CR CRSource: Ecopetrol, Vice Presidency of HSE and Operational SustainabilityNational Callto BiodiversityIn 2012 execution began of 11 new projects thatwere winners of the National Call to Biodiversity2011, and seven from the 2009 version werecompleted.The diversity of projects has enabled their resultsto not only generate baseline biotic information,but also promote national and regional bills for theconservation of species and ecosystems, as well asthe review of existing regulations regarding ballastwater and fish repopulation, among others.Implementation of biodiversityactions by partnersUnder the 2012 partnership contracts,biodiversity actions representing $ 1,282 millionwere executed.The actions were undertaken primarily:With Chevron: in a birdwatching program inareas surrounding the Ballena Drilling Projectand the execution of hydrobiological studies onthe diversity of aquatic fauna and vegetation inlakes surrounding the Ballena Drilling Project.With Pacific Rubiales: in the monitoring ofterrestrial-aquatic mammals, characterizationsof flora and fauna, and an inventory andcharacterization of lentic and lotic bodies.

Environmental dimension225TestimonialAlegría FonsecaAlma Foundation DirectorAll this has arisen fromsystemic deterioration, dueto works that have upsethydraulic dynamics and due topollution.To this end, we designed aproject to develop a protocolfor ecological and participatoryrestoration of the four wetlandsin that region: Llanito-SanSilvestre, in Yondó (Santander);Juncal-Baquero, in Gamarra(Cesar); Tabacurú-La Eusebia,in San Pablo (Bolívar), andCachimbero-El Encanto inCimitarra (Santander).We took advantage of thisspirit of participation fromcommunities, and what we didwas become the umbilical cordbetween the fishermen andentities that, like Ecopetrol,have a commitment to help.Fortunately, this project wonthe call to biodiversity carriedout by Ecopetrol and theMinistry of Environment tofund and support projects forthe sustainable conservationand management of wetlandslocated in the areas of influenceof the company’s operation.“As a foundation and researchcenter that safeguards thecountry’s environmentalinterests, we wanted to engagein the difficult situation facedby fishermen in the region ofMagdalena Medio.Fishermen in the region livein the midst of poverty andneglect. Fishing in the riverdecreased from 1977 to 2011 byover 90%. This means that in2012 the catch, on average, was6,000 tons, when in 1977 it was77,000 tons.Additionally, the size offish has decreased and thecatfish, which once measured85 centimeters, today are amaximum of 55 centimeters.To create the restorationproposal, we assessedexisting information in thearea. Ethnography work wascarried out and, throughwhat is called a dialogue ofknowledge, we learned ofthe knowledge possessed bytraditional fishermen and thestate of the existing technicalhydraulic, biological andgeomorphological aspects.During the development ofthe project, we realized thatthe fishermen’s associationsin the region want to becreators of policies pertainingto the management of thewatershed and for years havehad proposals for the river’senvironmental and fishingmanagement.With the consent of the State,we decided to organize an interinstitutionalroundtable for therestoration of the ecosystemsin Magdalena Medio, to give it acoherent policy that maximizesthe resources of the nationalbudget, and that’s somethingvery important we can give tothe project.Based on that, we are proposinga restoration protocol, which isa roadmap in which fishermenand environmental andmunicipal authorities will agreeon the minimum activities thatshould be considered for anyintervention in the wetlands,be they infrastructure works,the carrying out of actions forenvironmental recovery, socialdevelopment or others.”

226Vulnerable speciesin operating areasAnnually the company conducts update processesfor Environmental Management Plans (EMP), whichin 2012 yielded the following results in the Tibú andPutumayo operations.Table 48.Vulnerable species in the Tibú operating areaCommon nameScientific nameCITES *IUCN categoryTibúIn 2012, in Tibú, Ecopetrol carried out wildlifemonitoring in the field of the same name, resultingin 294 species including amphibians, reptiles,birds and mammals, of which 27 (see Table 48)were identified as vulnerable, though in their vastmajority are of minor concern (LC category forthe IUCN ).IUCN conservation categoriesLC: Least ConcernNT: Near ThreatenedVU: VulnerableEN: EndangeredCR: Critically EndangeredEW: Extinct in the WildEX: Extinct*CITES AppendicesI: Species in danger of extinction,their trade is permitted only inexceptional circumstances.II: Species not necessarily indanger of extinction, but theirtrade must be controlled in orderto avoid utilization incompatiblewith their survival.III: Species protected in at leastone country, which it why itrequires cooperation to preventits unsustainable or illegalexploitation.Source: Ecopetrol, VicePresidency of HSE andOperational SustainabilitySouthern Black-bellied Whistling DuckDendrocygna autumnalis discolorIILCSavanna HawkButeogallus meridionalisIILCRoadside HawkButeo magnirostrisIILCYellow-headed CaracaraMilvago chimachimaIILCOf these, the one that requires the greatest care,considering both its conservation category underthe IUCN criteria and the CITES Appendices, isthe White-lipped peccary, a type of Mountain Hogthat is near threatened (NT).The Northern tamandua, a species of Anteater,is of minor concern under IUCN criteria (LC) butunder the CITES Appendices it is a protectedspecies in at least one country, which it why itrequires cooperation to prevent its unsustainableor illegal exploitation (III).Source: Ecopetrol, Vice Presidencyof HSE and OperationalSustainabilityBrown-throated ParakeetAratinga pertinaxIILCSaffron-headed ParrotPyrilia pyrilia(Pionopsitta pyrilia)IILC

Environmental dimension227Spectacled caimanAnthracothorax nigricollisIILCYellow-crowned AmazonAmazona ochrocephalaIILCBarn OwlTyto albaIILCGray-headed KiteLeptodon cayanensisIILCTropical Screech OwlMegascops cholibaIILCRufous-breasted HermitGlaucis hirsutusIILCHarris’s HawkParabuteo unicinctusIILCPale-bellied HermitPhaethornis anthophilusIILCBlack-throated MangoAnthracothorax nigricollisIILCCaracara MoñudoCaracara cheriwayIILCWhite-chinned SapphireHylocharis cyanusIILCNorthern tamanduaTamandua mexicanaIIILCAmerican KestrelFalco sparveriusIILCWhite-fronted capuchinCebus albifronsIILCCrab-eating foxCerdocyon thousIILCOrange-chinned ParakeetBrotogeris jugularisIILCNeotropical otterLontra longicaudisIDDWhite-tailed deerOdocoileus virginianusIILCRed-lored AmazonAmazona autumnalisIILCWhite-lipped peccaryTayassu pecariIINTCollared peccaryPecari tajacuIILC

228PutumayoIn terms of Putumayo’s operations, theupdated vulnerable species listings show17 species of mammals, 12 birds and oneamphibian (see Table 49).Of those requiring greater care, consideringtheir conservation status both under the IUCNcriteria and the CITES Appendices, are the SouthAmerican tapir which is critically endangered(CR), the Jaguar and Brown woolly monkey,considered vulnerable (VU) and the Margay, theRoadside Hawk and Harpy Eagle, which are nearthreatened(NT) species.Table 49.Vulnerable species in the Putumayo operating areaAmphibiansStrabomantidaePristimantis altamazonicusEleutherodactylus altamazonicusLCBirdsAccipitridaeButeo maanirostris Roadside Hawk NTHarpia harpyja Harpy Eagle I NTFamilySpeciesSpecies Syn.CITES *IUCN CategoryTrochilidaeDoryfera johannae II LCHeliodoxa aurecens II LCPhaethornis bourcieri Straight-billed Hermit II LCPhaethornis malaris Great-billed Hermit II LCThalurania furcata Fork-tailed Woodnymph IIIUCN conservation categoriesLC: Least ConcernNT: Near ThreatenedVU: VulnerableEN: EndangeredCR: Critically EndangeredEW: Extinct in the WildEX: ExtinctPipridaeLepidothrix coronata Blue-crowned ManakinRamphastidaeRamphastos tucanus White-throated Toucan IIPsittacidaeAmazona amazonica Orange-winged Amazon IIAratinga weddellii Dusky-headed Parakeet IIBrotogeris versicolurus Periquito Aliblanco IILC

Environmental dimension229ProyectoAdopte su logoEn una nueva alianza con el Instituto Alexandervon Humboldt, se inició el desarrollo del proyectoAdopte su logo que busca concientizar y unir alas entidades que son representadas por logosvivos para generar iniciativas que permitan suconservación o manejo.Es así como para el caso de la Iguana verdeque representa a Ecopetrol, ya se identificaroncuatro áreas de estudio en el Magdalena Medio,los Llanos Orientales y el Valle del Sinú, en lasque se monitorearán diferentes poblaciones y sedeterminará qué tipo de acciones deben desarrollarsepara el mantenimiento de las mismas, dependiendode los impactos que cada grupo experimenta deforma individual.El proyecto Adopte su logo tiene un importantey fuerte componente de comunicaciones quedesarrollará actividades para los grupos externose internos (academia, entidades gubernamentales,comunidad y empleados de Ecopetrol,principalmente), buscando no sólo dar a conocerla información técnica sino a generar cambios encuanto a la percepción de las iguanas como animalsilvestre en las regiones y el nivel de apropiación dellogo de Ecopetrol.MammalsDasypodidaeCabassous unicintus Southern naked-tailed armadilloLCCebidaeSaguinus niaricollisLCSaimiri sciureus II LCAtelidaeLagothrix lagothricha lugens Brown Woolly Monkey II VUPitheciidaeCallicebus torauatus II LCProcyonidaePotos flavus Kinkajou III LCProcyon cancriyorus Crab-eating raccoonLCFelidaeLeopardus wiedii Margay I NTPanthera onca Jaguar I VUTapiridaeTapirus terrestris South American tapir II CRTayassuidaePecari tajacu Collared peccary II LCTayassu pecari White-Collared peccary II LCCervidaeMazama americana Red brocket DDAgoutidaeCuniculus paca Lowland paca LCCuniculus taczanowskiiLCDasyproctidaeDasyprocta fuliginosa Black agoutiLCEychimidaeProechimys aoeldiiLC*CITES AppendicesI: Species in danger of extinction,their trade is permitted only inexceptional circumstances.II: Species not necessarily indanger of extinction, but theirtrade must be controlled in orderto avoid utilization incompatiblewith their survival.III: Species protected in at leastone country, which it why itrequires cooperation to preventits unsustainable or illegalexploitation.Source: Ecopetrol, VicePresidency of HSE andOperational Sustainability

230EnvironmentalcultureTo continue strengthening environmental issues atall levels of the company, in 2012 several activitieswere carried out, some of which are outlined below.Eco-Efficiency Technology ForumThe Eco-Efficiency Technology Forum broughttogether 210 people from Ecopetrol’s variousdepartments, who along with 20 experts andtechnology providers, delved into specific casesof technology application for problem solvingand eco-efficient practices, establishing thirteeninitiatives applicable in the company.National EnvironmentalMeeting of Experts onEnvironmental issuesThe National Environmental Meeting of Expertson Environmental issues was held, where therewas discussion, with staff from the operatingareas and the corporate level, of environmentalissues related to the main conclusions of theUnited Nations Conference on Environment(Rio +20); the challenges for the Oil & Gassector in a green, low-carbon economy; thenew offsetting scheme for loss of biodiversityin Colombia; the Ecopetrol CO 2 ManagementStrategy - Business case: Opportunities forreducing greenhouse gas emissions from CH 4emissions in the Magdalena Medio RegionalDepartment.Workshop on EnvironmentalRisks Associated with theUndertakingof Exploratory Drilling ActivitiesOn November 28 and 29, 2012, in Bogota,Ecopetrol organized the Workshop onEnvironmental Risks Associated with theUndertaking of Exploratory Drilling Activities, aspace focused on understanding and analyzingthe main environmental risks in exploratoryhydrocarbon drilling activities for the oil and gasindustry in offshore environments.The objectives of the workshop were tounderstand and discuss the main threats, risksand impacts on the coastal marine environmentassociated with offshore exploratory drillingand exchange experiences on methods andprocedures for the management of risks(identification, quantification and managementplans) on the coastal marine environment inoffshore activities.This workshop was attended by speakers withextensive experience and knowledge in the issuesaddressed, as well as 60 participants from variousgovernment, academic and industrial institutions,including the National Environmental LicensingAuthority and the General Maritime Department.Less paper, more lifeThe Less paper, more life competition, conductedin 2011, migrated in 2012 to the implementationof a project that continued to promote thereduction of paper consumption through theintervention in processes that historically haverequired a great amount of printing.This requires deep cultural changes, includingthe incorporation of information managementhabits, such as writing, editing, consultingand filing using technological resources, andrejecting the use of paper in these activities,which not only depends on the repetition ofthe habit but also its achievement in a fun andeducational way.Thus, its implementers put their creativity intothe initiatives, which is reflected in some of itsnames: No printing day, The Mystery of theGreen Book, Orphan Sheets, Paper addicts,Green Footprints.

Environmental dimension231No printing dayThe second No printing day was held on October24, 2012, an effort that helped to reduce paperconsumption by 17% compared to the daily averagefor September of the same year.You can work without paperAs proof that it is possible to work withoutpaper, 26 staff were actively involved inthe community of practice, sharing theirexperiences and giving their recommendationson how to do this.The Mystery of the Green BookDuring the Occupational Health Week (SEMANASO,for its acronym in Spanish) the Mystery of the GreenPaper contest was held, which involved 220 people,and which was designed to encourage on-screenreading. As a result of this event it was possible todocument, for the public domain, the good practicesthat with regard to this habit, gave us ​the 8 winners.Orphan SheetsIn one of the areas of greatest consumption, ofwhich 150 people are a part, the Orphan sheetsstrategy was designed and implemented, whichsought to increase the habit of collecting prints.This strategy has reduced the abandonment ofprints by 85% and reduced the demand for prints inthis area by 36%.Green FootprintsTo encourage the participation of staff andcontractors, we created two new sections inthe Community of Practice: Green Footprints,which aims to document testimonials, and GreenClassroom, which aims to train on concepts thatcontribute to the objectives of the project.In 2012 there were two publications of GreenFootprints (Travel Management Initiatives and UT-CITFile Management) and two more for Green Classroom(on the TRD and Presidential Directive 04 / MINTIC).Green HeartIn recognition of the reduction in paperconsumption indicators or active participationin an initiative to optimize the use of paper inthe processes, 83 individuals were recognizedwith a pin that represents a green heart,testimony to their commitment to the project.Digital PeopleAn important step in 2012 was to standardizethe printing service under the IP protocol,which enables more reliable indicators onconsumption from person to person andlimits the service to duplex printing by default.Also, as a result of the review of 26 regulatorydocuments, there is now a definition ofbehaviors to generate a culture of DigitalPeople.Thus in 2013, all actions will be aimed atcreating a culture of Digital People, seekingto promote habits associated with thereplacement of paper, rather than just areduction in this, through greater use oftechnological tools available to service thecompany.

232Less Paper, More Life in figures630 people attended the 12 awarenessraising workshops and 20 regular meetingsthat addressed issues related to printingindicators, responsible paper consumptionhabits, support for paper-saving initiatives inthe processes and commitment rituals.600 trees were planted during a reforestationday to offset paper consumption duringthe last three years in the Shared ServicesCenter.7% less printing during the year, whichrepresents a saving of 862,702 sheets and108 trees less, compared to 2011.Other activities• Participation in the Occupational HealthWeek with the realization of the electricaland electronic equipment collection day.• Contest: 100 ways to help the environmentin Ecopetrol.• Training and awareness raising onenvironmental issues for staff that aremembers of the Joint Occupational HealthCommittee.• Support and participation in theXIV International Conference onEnvironmental Law.• Participation in the VIII InternationalConference on Energy and Mining Law,conducted by Universidad Externado.

Environmental dimension233Syrigma sybilatrix, Casanare.

234Socialdimension05For Ecopetrol it is not enough to achieve a given production underits targets; in its management model, people come first. Andthat’s what this chapter discusses: how the company conducts itslabor practices, how it cares about human rights and how it takesresponsibility for its impacts on society.The 2011-2020 strategic framework assigns a specific value tothe relationships that the company has with its stakeholdersand therefore, this section sets out the progress and setbacksexperienced in 2012, compared to 2011, in the main indicators for sixkey aspects: Labor Practices, Human Rights, Society and Community,Relations with Suppliers, Contractors, Shareholders and Customers.LaborpracticesHumanrightsSociety andcommunity

Social dimension235Materiality of the Social DimensionThe determination of materiality for the Social Dimension’sindicators has been established after a thorough analysis ofthe results presented by various studies such as CorporateBenchmarking conducted by Sustainability Investing (SAM), whichin this dimension rated Ecopetrol among the 98% of Oil & Gascompanies; the study conducted in 2012 by Centro Vincular thattakes into account the views of Ecopetrol’s seven stakeholders;participation in the 2012 version of Great Place to Work, and thebiannual study by the Reputation Institute, conducted in 2011.Responsibility toourcontractorsRelationswith shareholdersResponsibility withthe customer andproductsLa Chimicuica Stream, Chibolo, Magdalena

236Labor practicesWithin its corporate policy and its Strategic Framework 2011-2020,Ecopetrol, aware that its operation must be in harmony with its variousstakeholders and, in particular with the people who work in the company’svarious operational and support areas, has included an explicit guidingprincipal on human talent management, aimed at generating value forthe organization through labor practices that contribute to both theprofessional and personal advancement of its workers, contributing to thesustainable development of the company.

Social dimension237Ecopetrol’s human talent strategy is contained within thecompany’s strategic framework as one of the guiding principles onorganizational consolidation that supports the growth strategy andrecords labor practice indicators in detail, which are integrated intothe Balanced Scorecard. To advance this strategy, three Megatargetswere defined to 2015:2Ensure thehuman capabilitiesrequired to achievethe strategyEnsurelabor normality1Achieve 66 pointsin the Work EnvironmentIndex (WEI), under theGreat Place to Workmethodology3BarrancabermejaRefineryLabor practicesmaterialityThe determination of materiality for laborpractices and work ethics indicatorsconsiders, among other sources, theconcerns expressed by its workers throughregular channels and practices, in additionto the information that can be inferred fromthe aforementioned studies: CorporateBenchmarking conducted by SustainabilityInvesting (SAM), the results of Ecopetrol’sparticipation in Great Place to Work, the 2011findings of The Reputation Institute, and the 2012report produced by Centro Vincular.Further to this, is Ecopetrol’s commitment to itsemployees to create a great place to work within aframework of relationships of trust, transparency andproductivity, which requires the fulfillment of strategicobjectives that involve ensuring fair compensation,providing leadership that leverages the developmentof employees and the company’s work environment,ensuring global standards in occupational health andsafety, respecting and promoting labor and tradeunion rights, and contributing to the quality of life ofemployees, retirees and family.

238Thus, based on all the studies conducted, theinformation gathered, the opinions expressed,the concerns analyzed, as well as thatestablished by the GRI G3.1 methodology and Oil& Gas supplement, the integrated managementof human talent was undertaken in 2012 aroundfive major processes, which will be set out in thissub-dimension:Incorporation of human talent• Distribution of staff• Management of roles and compensation• Men’s and women’s salariesDevelopment and growth of human talent• Promotions and career plans• Consolidation of the learning process• Leadership Development Program• Performance evaluation of human talentWork environment and organizationalculture• Organizational climate• Welfare• Retirees and family• Gente Ecopetrol FoundationCollective labor relations• Trade Unions• Dynamic and productive labor relations• Grievances and coexistence committeesOccupational health and safety• Occupational Health• Absenteeism• Accidents• Process Safety

Social dimension239Incorporation ofhuman talentEcopetrol is an important source of employmentfor Colombians in each area of ​the country whereit operates.Distribution of staffAt December 2012, Ecopetrol’s total work forceconsisted of 8,087 employees (see Figure 42),representing an increase of 784 compared to theprevious year.Additionally, in the same year it had 615 interns, afigure that increased by 22.7% compared to 2011.Figure 42.Ecopetrol Work Force90008000700060005000400030002000100005,8015,8636,517 6,695 6,7447,3038,8072006200720082009201020112012Source: Ecopetrol, Vice Presidency of Human Talent

240In the last four years, Ecopetrolhas hired 2,809 new workersand has incorporated 1,897 internsAs a result of selection processes in the last fouryears, Ecopetrol has hired 2,809 new workers and hasincorporated1,897 interns through apprenticeshipcontracts (see Table 50).This confirms Ecopetrol’s position as one of themain generators of employment and apprenticeshipin the country.Table 50Hiring of staffHirings/year 2009 2010 2011 2012New workers 560 784 595 870Interns 434 347 501 615Source: Ecopetrol, Vice Presidency of Human TalentInternational searchAs part of the strategy to achieve high competitivestandards, in 2012 eight Colombians residing abroadwere hired, in addition to nine foreign experts indifficult-to-find areas of expertise (see Table 51).Table 51Hiring of staff residing abroadInternational search results 2009 2010 2011 2012Colombians residing abroad 29 15 7 8Foreign persons 7 9 6 9Total 36 24 13 17Source: Ecopetrol, Vice Presidency of Human Talent

Social dimension241Campo TecaDistribution by gender24% of Ecopetrol’s active staff at December 2012were women (1,975), while the remaining 76% (6,112)were men. This represented an increase of 176 womenin 2012 compared to 2011, while during the sameperiod there was an increase of 608 persons in malework force (see Table 52), representing a 9.78% increase inwomen and 11.04% in men.The difference in the number and percentage of men andwomen in the organization is due to the fact that in theColombian labor market, there are more men than womenwith skills in specialties inherent to the oil and gas sector.Table 52Distribution by genderGender 2008 2009 2010 2011 2012Female 1,461 1,381 1,637 1,799 1,975Male 5,056 5,314 5,107 5,504 6,112Total 6,517 6,695 6,744 7,303 8.087Source: Ecopetrol, Vice Presidency of Human Talent

242Distribution by contract typeIn Ecopetrol there are three contract types:indefinite, temporary occupying vacancies andother temporary, which correspond to staff hiredfor projects. At December 2012, of the 8,087employees of the company, 81% (6,522) werecontracted under the indefinite contract type. Thisdistribution can be seen in Table 53.Table 53.Work force by contract typeWork force type 2008 2009 2010 2011 2012Indefinite 5,252 5,541 5,409 5,861 6,522Temporary occupying vacancies 764 687 956 868 732Other temporary* 501 467 379 574 833Total Employees 6,517 6,695 6,744 7,303 8,087*Staff hired for projectsSource: Ecopetrol, Vice Presidency of Human TalentTable 54Distribution by ageDistribution by ageIn Ecopetrol’s working population there is a widerange of ages. At December 2012, 14% were under 30,61% were people between 30 and 45, and 25% wereover 45 (see Table 54).Age ranges 2008 2009 2010 2011 2012Under 26 10% 9% 6% 6% 6%Between27 and 29Between30 and 35Between36 and 4412 % 12% 11% 9% 8%21 % 18% 27% 28% 28%35% 36% 35% 34% 33%Over 45 23% 24% 21% 23% 25%Total employees 6,517 6,695 6,744 7,303 8,087Employee composition by regionThe highest concentration of employees (82%) is found intwo regions: Central South and Magdalena Medio, becausecontained in these regions are the BarrancabermejaRefinery, the largest in the country, and the producing fieldsof greatest age and with the highest number of active wells(see Table 55).Table 55.Distribution of employees by regionRegions 2008 2009Central South 42% 41%Magdalena Medio 43% 44%North 8% 8%East 7% 7%Other employees 6,517 6,695Source: Ecopetrol, Vice Presidency of Human TalentSource: Ecopetrol, Vice Presidency of Human Talent

Social dimension243Payroll typesEcopetrol has two occupational schemes, whichclassify employees into:The composition of employees by type of payroll andtrainees, can be seen in Table 56.Table 56Employees by type of payroll and trainees (in percent)Payroll 2008 2009 2010 2011 2012Conventional Payroll:covers the staff governed by theCollective Bargaining Agreement.Conventional 32 31 30 32 28Directive 65 65 65 63 67Trainees 3 4 5 5 5Source: Ecopetrol, Vice Presidency of Human TalentDirective Payroll:includes managerial and technicalroles that Colombian laborlaw regards as employees formanagement, supervision, andmaintaining confidentiality,i.e.,those in leadership and technicalpositions established in thecompany’s organizational structureAlso, the company brings in trainees from theSENA (National Learning Service) and variousuniversities around the country, which are notpart of the payroll.Management of positionsand compensationSince 2007, the company has been continuously workingon its organizational model designed to attract and retainthe best talent in the country.The process begins with the definition of the organizationalstructure and sizing of the work force required for thefulfillment of the company’s objectives. It covers theestablishment of job descriptions, aligned with definedroles and responsibilities, the assessment of the position,its location on the roles map and the management of theorganizational structure.Profiles are adjusted annually to ensure that the rolesare aligned with the strategic aims of Ecopetrol and itscorporate group, and the roles map is updated, accordingto the requirements of the organizational structure.2010 20102011 2011 2012201244% 44% 45% 45% 46%46%44% 41% 39% 39% 36%36%8% 8% 9% 9% 11%11%7% 7% 7% 7% 7%6,744 6,7447,303 7,303 8,0878,087Also since 2007, there has been a compensation policy,approved by the Board of Directors, which applies to allthe company’s managerial staff. All positions are assessedusing the HAY® methodology and remuneration isbenchmarked to the oil sector.The company’s compensation policy seeks internalfairness and competitiveness in relation to the sector,for which it has a wage structure based on the conceptof money income or fixed payment that includes basesalary plus legal and extra legal benefits, while to maintain

244fairness it has bands, which in terms ofmonetary income, range from -20% to+20% compared to the oil sector median.For their part, conventional payrollstaff are governed by that agreed in theCollective Bargaining Agreement, whichincludes a scale with six levels and twelvewage categories.Minimum wagein EcopetrolIn Ecopetrol, the minimum wage in 2012 was $1,311,390 per month, updated with the generalincrease in 2012 (4.35%), as agreed in the CollectiveBargaining Agreement 2009-2014, which compared tothe minimum monthly wage in Colombia for the sameperiod ($566,700) corresponds to 2.21 minimummonthly wages. In 2011, the minimum wage inEcopetrol was $ 1,256,730.EcopetrolMinimumWage 2012$1,311,390per monthEcopetrolMinimumWage 2011$1,256,730per monthThe compensation provided by Ecopetrol, both toits directive payroll employees and conventionalpayroll employees, is applied regardless of anycondition associated with the worker, and with nodiscrimination

Social dimension245Men’s and women’s wagesThe compensation provided by Ecopetrol, both toits directive payroll employees and conventionalpayroll employees, is applied regardless of anycondition associated with the worker, and with nodiscrimination for reasons of sex, gender, race,national or family origin, language, religion, orpolitical or philosophical views.There are some percentage differences in averagemonthly monetary income between women andmen, which correspond to the proportion of thepopulation of women versus men (1 to 2.2). If thefigures are analyzed individually, it is seen that thereis equity in gender monetary income at the sameposition level (see Table 57).Table 57.Wage difference by gender – Conventional Payroll (Figures in pesos)PositionclasificationPositionlevelAverage monthlymonetary incomewomenAverage monthlymonetary incomemenPercentage thatwomen’s monetaryincome is higherPercentage thatmen’s monetaryincome is higherA1 1,311,390 NA NAA2 1,376,970 1,446,005 - 5.01%B3 1,445,940 1,450,135 - 0.29%B4 1,518,300 1,522,144 - 0.25%C5 1,594,290 1,598,069 - 0.24%C6 1,674,120 1,679,304 - 0.31%Operators,Maintainers,Support ServicesD7 1,809,945 1,786,606 1.31% -D8 1,892,003 1,891,4300.03%-D9 1,997,130 2,000,442 - 0.17%E10 2,112,600 2,116,488 - 0.18%E11 2,234,760 2,239,070 - 0.19%F12 2,363,970 2,407,298 - 1.83%F13 2,500,680 2,577,962 - 3.09%Source: Ecopetrol, Vice Presidency of Human Talent

246In some cases, for staff occupyingpositions within directive payroll, as aretention strategy for critical positions, theaforementioned pay band is used, whichexplains why within a singe position level,there can be people with different wageallocations with some minor differences whencomparing wages between men and women,favoring one over the other and vice versa, andprovided that the monthly monetary incomeis within the salary range of the correspondingposition level (see table 58).Table 58.Wage difference by gender – Directive Payroll (Figures in pesos)Position clasificationPositionlevelAverage monthlymonetary incomewomenAverage monthlymonetary incomemenPercentage thatwomen’s monetaryincome is higherPercentage thatmen’s monetaryincome is higher1 2,924,085 3,481,866 - 19.08%AdministrativeTechnicians,Secretaries2 3,798,343 3,829,848 - 0.83%3 4,659,256 4,831,157 - 3.69%4 5,821,003 5,839,226 - 0.31%5 7,481,520 7,480,018 0.02% -OperationalTechnicians,Supervisors,Professionals andMiddle Management6 9,624,291 9,651,116 - 0.28%7 12,638,451 12,715,621 - 0.61%8 15,551,944 15,736,848 - 1.19%9 19,941,637 20,223,372 - 1.41%10 24,308,476 24,766,762 - 1.89%11 30,730,619 28,877,837 6,42% -High Direction12 35,087,851 36,020,353 - 2.66%13 43,382,000 44,575,087 - 2.75%Source: Ecopetrol, Vice Presidency of Human Talent

Social dimension247Development and growthof human talentAttracting the best talent available in the countryis fundamental to Ecopetrol’s operational success,but maintaining that level of excellence requirespurposeful and permanent support from thecompany for the development and growth of thepeople that form part of it.Promotions and career plans71% of positions in Ecopetrol areconcentrated in professional or technicalcareers, which includes professional,supervisor and technical operator, andadministrative roles.Table 59 presents this distributionconsidering the work force with a cut off atDecember 2012.Moreover, in 2012 there were 1,140 internalpromotions, compared to the 731 that weremade in 2011.Table 59Distribution of work force by career typeCareer type 2009 2010 2011 2012Administrative 476 607 546 551Operational 2,166 2,116 2,183 2,384Professional or technical 4,053 4,021 4,574 5,152Overall total 6,695 6,744 7,303 8,087Source: Ecopetrol, Vice Presidency of Human Talent

248Personnel length of serviceWhile in the company 14% of workers have workedwith the company for more than 20 years , 72%of Ecopetrol employees, at December 2012, had alength of service of less than 15 years. For a betterunderstanding, Table 60 breaks down this figure intolength of service percentages by ranges of employeetenure years.Table 60.Distribution of employees by length of service rangeLength of service ranges inyears2008Share2009Share2010Share2011Share2012ShareBetween 0 and

Social dimension249FIBO: Program for theComprehensive BasicTraining of ProductionOperatorsConsolidation ofthe learning processThe learning process within the company wasconsolidated in 2012 through coordination betweenthe Corporate University and the Learning Unit,which resulted in the creation of the EcopetrolUniversity, which was structured based on industrybest practices and aligned with the company’sstrategy. With the University, the followingschools were formed: Innovation and Technology,Downstream, Upstream, and Transport andLogistics. Similarly, high-impact and high-relevanceprograms have been developed to strengthentechnical skills, among which are:Master’s in the Refiningand PetrochemicalProcessOffshoreProgram forExplorationInternationalCertification forTransport OperatorsOnce individual gaps from the performanceevaluation process are identified, there are actionsin training (rotation, secondment), mentoringor coaching and classroom training in the threetypes of competencies defined for the company:organizational, leadership (applies only for thosewho have staff lining into them) and technical.In 2012, there were 46,937 development actionsthat involved 6,774 employees, representing anaverage of 85.8 man-hours versus an average of86.1 man-hours last year.Technology inIndustrial MechanicalMaintenance forproduction maintainers.HSE competencies werestrengthened throughthe Work Control Module,Certifications in Heights,Behaviors Assurance andProcess SafetyTo ensure these actions, for the third consecutiveyear Ecopetrol increased the budget allocated tothe development of its people by 3%, from $30,000million in 2011, to $33,000 million in 2012.Operator TrainingProgram for Reficar

250Leader development programIn 2009, as a result of a benchmarking exerciseon successful leadership profiles in world-classcompanies and a methodology to cross-referencethese with Ecopetrol’s strategic needs, aconsolidated leadership model required to achievethe company’s strategy to 2015 was established.This model considers the interplay betweenvalues, leader skills, management styles, personalmotivations, the labor microclimate generatedand the impact on results, and involves a structuraldesign with three levels of leadership: strategic,tactical and operational.As a result, in 2012, 210 people graduated from theTransformational Leaders program delivered by theLeader School, adding to the 182 graduates from2011 and 230 graduates from 2010.Other standout leader training actions conducted in2012 were:IntegratedCommunications andTeams Program,which covered a universe of 1,153people: 361 leaders and 792 employees,whose purpose was to improve theseskills as a priority in this population.Sustainable StrategicManagement Program,focused on closing gaps in technicalcompetences for strategic and tacticalleaders, as well as individual and groupcoaching programs to strengthenleadership and organizationalcompetencies in teams.Thus began the Senior Management Programin Projects, aimed primarily at those who leadprograms and projects of great impact within theorganization. Two groups were organized that willcomplete the program in 2013.Additionally, in 2012, specialist HSE support wascarried out for 90 leaders selected by their levelof importance and involvement in improvingthe commitment to life competency at theorganizational level.

2012Leader ProgramGraduates210PeopleSuccession managementFrom 1 August 2010, Colombian law provided thatall pensions that are provided within the countrymust fall within the Social Security System, whichis why Ecopetrol ceased to have a special pensionscheme.With this in mind, from 2009, Ecopetrolimplemented a succession model designed to meetthe specific needs of the company. The impactof this initiative was crosscutting, covering 125critical positions occupied by employees who metretirement requirements in July 2010.In 2011, the tools for the succession process wereimproved in order to strengthen the effectiveidentification of successors and the planning oftheir development.In 2012, the company focused on strengthening thedefinition of successors based on their performanceand preparation, meaning a person’s readiness toassume a higher level position depending on theLeaders EventCorporate Group 2012fit with such position and the exposure time thatthe candidate has had. Similarly, we continuedwith the planning and execution of actions forthe accelerated development of technical skillsand knowledge management through internalexposure by means of assignments, secondments,special assignments and participation in SteeringCommittees; support and specialized training tostrengthen preparedness for the future positionincluding coaching, languages​, senior managementskills and leadership profiles, among others, whichensures critical knowledge and generationalhandover, as a strategy to ensure businesssustainability and operational continuity.

252Corporate inductionEmployees who joined Ecopetrol in 2012participated in various stages of induction:welcome or basic induction, virtual induction“Getting to know my company,” specific inductionin the role and corporate induction.In 2012, 414 new employees participated in thecorporate induction and another 868 employeescompleted the virtual induction.Performance evaluationPerformance management for Human Talent inEcopetrol is carried out in four phases: planning,monitoring, evaluation and recognition.Table 61 shows the population of employeescovered by performance evaluation in Ecopetroland its results from 2005-2011.Table 61.Number of employees with performance evaluationsYear 2005 2006 2007 2008 2009 2010 2011Total employees 5,997 5,801 5,863 6,517 6,820 6,770 7,713Employees withperformanceevaluations4,455 5,327 5,823 6,212 6,727 6,741 7,610Coverage percentage 74% 92% 99% 95% 99% 99% 99%Source: Ecopetrol, Vice Presidency of Human TalentPerformance evaluation for 2012 will be carried outin the months of January and February 2013, which iswhy this figure is not contained in this report, but willbe available for those interested on Iris, our intranet.

Social dimension253Work environment andorganizational cultureIn 2012 a survey was conducted on organizationalculture with focus on HSE, in addition to adiagnostic that took into account the followingstudies: Reputation, Dupont Study, WorkEnvironment results from Great Place to Work(GPTW) and a demographic study. The resultsmade it possible to identify the organizationalculture traits that will be worked on throughan interdisciplinary strategy that will beexecuted in 2013, based on three mainfocuses: ethics, commitment to life anddiscipline to support process management.Control Center,Barrancabermeja RefineryOrganizational climateThe company has been measuring its workenvironment since 2006 with the internationalmethodology of the Great Place to WorkInstitute (GPTW). The measurement includesfive dimensions: Credibility, respect, integrity,camaraderie and pride.Between 2006 and 2010 the trend in the resultswas incremental until reaching the satisfactorylevel, going from 37.2 to 72.9 points. In 2011, a workenvironment index of 70.7 points was obtained,which represented a decrease of 2.2 pointscompared to the previous year.In the same year, 2011, GPTW made ​a methodologicaladjustment worldwide to take more precise readingsthat are sensitive to changes in results.The methodological change was to expand theassessment segments, dividing the average levelinto two parts: Average (+) and Average (-). Byapplying the change in Ecopetrol, 18 of its 20 Average

254Based on the results obtained, the company has set out toconsolidate a transformation plan for the work environment andachieve an increase to satisfactory levels, enabling Ecopetrol tobe a great place to workvariables were in the Average (-) category, which ledto the result of 70.7 in 2011, becoming 58.2.The 2012 Work Environment Index closed at57.1 under the new methodological approach,decreasing by 1.1 compared to the previous year(see measurement trends in Figures 43 and 44).Based on the results obtained, the company hasset out to consolidate a transformation plan forthe work environment and achieve an increase tosatisfactory levels, enabling Ecopetrol to be a greatplace to work in a sustainable manner.Figure 43.Great Place To Work ResultsWithout methodological adjustmentFigure 44.Great Place To Work ResultsWith methodological adjustment70.772.9 70.763.969.548.348.758.8 59.358.257.137.232.026.220062007200820092010201120122006200720082009201020112012Source: Great Place To Work, ColombiaSource: Great Place To Work, Colombia

Social dimension255TestimonialThis measure also coversEcopetrol’s working fathers, astheir leave, which by law is eightbusiness days, is extended by threeadditional business days, whichultimately results in almost two fullweeks to be with their family.Janine Álvarez ÁlvarezProfessional from the CorporateCommunications Unit“I’m a journalist, born in thedepartment of Tolima and came tobe part of Ecopetrol’s CorporateCommunications Unit in 2009, tocover information and journalisticsupport for regions encompassingthe Huila-Tolima OperationsSuperintendence.I think one of the greatestsatisfactions for a woman is thearrival of a child. The happinessthat a newborn child bringshas no comparison. But, oneof the biggest frustrations fornew parents is not being able toshare enough time with this newmember of the family.When I became pregnant, Ifound out that Ecopetrol haddesigned and launched theflexible postnatal leave benefit.In practice, this consists ofproviding a longer period oftime than that established byColombian law for maternityand paternity leave.By law, a working mother isentitled to maternity leave ofabout four months from thebirth of the child. I gave myselfthe task of carefully readingEcopetrol’s new regulation,and discovered that in additionto that provided by law,the company provides fourextra weeks rest, part-time,and paid. This means thatEcopetrol’s new mothers canenjoy 14 weeks of full-time restand four additional weeks withhalf work days.And this applies equally whenit comes to maternity leave foradoption or premature birth ofa baby!In mid-January my two beautifulbabies were born, which werebeautiful twins: Ana Sofía andAlejandro. And with them, Iwas able to enjoy this extendedmaternity leave.I was very happy to hear aboutthis new benefit because Ifelt it was a further sign thatEcopetrol genuinely cares fortheir working mothers and allowsthe detachment of mother andchild, and in my case with my twobabies, to be less traumatic. In2012, in terms of what I found,78 mothers and 156 fathers havemade ​use of this prerogative.I think the performance of a happymother is better, and she is moreproductive than a mother who isnot. With this benefit, it is possibleto comprehensively fulfill bothresponsibilities and roles.I am very proud to belong to thisgreat family that is Ecopetrol,since this measure demonstratesthat, for management, the balancebetween the personal life andwork life of their employees, isvery important.”

256WelfareStaff welfare is comprised of severalvariables, including the timely payment ofsocial benefits, in addition to the company’sown activities, which are aimed at obtainingan organizational culture of excellence.Welfare PlanWithin the activities that Ecopetrol carries out toimprove the work environment and organizationalculture, is the National Welfare Plan that includes thefollowing programs:Recognition of Excellence ProgramEach year employees have the opportunityto nominate their peers, their leaders andthe best projects in their areas, for theawarding of this prize.Of the 3,909 workers registered in2012,1,399 received awards. Table 62 showsthe evolution of this award since 2007.Table 62Recognition of Excellence by categoryCategories 2010 2011 2012Group 4,386 4.,789 3,511Individual 195 230 398Total employees registered 4,581 5,019 3,909Total employees that receivedawards1,273 1,399 1,698Source: Ecopetrol, Vice Presidency of Human TalentFamily–Company ProgramThrough the Family Day, the company promotesthe integration of the employee with their familyto reinforce corporate values ​and knowledge ofthe organization of which they are members, bymeans of family visits to the company’s facilitiesor through recreational days. In 2012,10,625people participated in the program amongemployees and their families, while in 2011,4,400 people participated.Gotas de Experiencia(Drops of experience)It is an act led by the Presidentof Ecopetrol and in whicheach year recognition givento employees marking 10, 20and 30 years of continuous ordiscontinuous service withinthe company. The programrecognized 326 workers in2011, and 396 in 2012.Maria Tonelli, Director of Social Management, receivesthe award at the 2012 Drops of Experience event from thePresident of the company, Javier G. Gutiérrez P.

Social dimension257Quality of life for employees,pensioners and theirbeneficiariesTo help improve the quality of life of allpeople within its direct sphere of influence inemployment, Ecopetrol provides a series ofbenefits that go beyond legal requirements,which are aimed not only at employees, butthe 10,469 direct pensioners and 42,837beneficiaries (see distribution of retirees andbeneficiaries in Tables 63 and 64).Table 63.Distribution of beneficiariesAge ranges2010 2011 2012Women Men Total Women Men Total Women Men TotalUnder 1 260 211 471 271 223 494 289 246 535Between 1 and 14 4,822 4,331 9,153 4,802 4,281 9,083 4,623 4,589 9,212Between 15 and 44 8,868 4,846 13,714 8,613 4,651 13,264 8,521 4,743 13,264Between 45 and 64 8,373 1,058 9,431 8,606 1,206 9,812 8,417 1,395 9,812Over 65 6,764 2,409 9,173 6,832 2,430 9,262 6,727 2,535 9,262Overall Total 29,087 12,855 41,942 29,124 12,791 41,915 28,577 13,508 42,085Source: Ecopetrol, Shared Service Center DepartmentTable 64.Distribution of pensionersAge ranges 2010 2011 2012F M Total F M Total F M TotalUnder 64 991 5,975 6,966 958 5,615 6,573 917 5,276 6,193Over 65 408 3,336 3,744 442 3,566 4,008 472 3,797 4,269Overall Total 1,399 9,311 10,710 1,400 9,181 10,581 1,389 9,073 10,462Source: Ecopetrol, Shared Service Center Department

258One of the key benefits is the payment byEcopetrol of up to 90% of educational expensesfor the children of workers and pensionersOne of the key benefits is the payment by Ecopetrolof up to 90% of educational expenses for thechildren of workers and pensioners, from pre-schoolthrough to completion of their professional degree.Additionally, to encourage saving, Ecopetrol offersits employees a stimulus in which for every pesothey save in the Ecopetrol Workers and PensionersCorporation (Cavipetrol), up to a ceiling of 3% oftheir salary, the company makes a contribution ofequal amount.Moreover, in 2012 there were training courseson personal finances, caring for children under12, a school for parents with teenagers, andstrengthening of couples, married persons orcohabiting persons.This program covered 1,129 people across the countryand the different topics covered obeyed the interestsexpressed by the employees and their families.Improving the qualityof life of pensionersDuring 2012, adjustments were made in response tothe Anti-red tape Law to minimize response times andensure service to pensioners.To do this, work was done on two fronts:RegulatoryadjustmentsIn compliance with the decrees 19 and1450, 2012 (Anti-red tape Law) issuedby the National Government, fromJuly 1, 2012, proof of life (survival)is provided through the records ofthe National Civil Registry, throughthe Ministry of Health and SocialProtection.Execution of theCulturalization PlanTraining was conducted on thepensioner service model nationwide,in order to respond to requests andprovide advice on pension issues,as well as to inform regarding actualtimes determined by law, which madeit possible to broaden knowledge andresponse capacity from the first lineof service, in order to respond to thegreater number of requests received.

Social dimension259Meetings with pensionersDuring 2012 six meetings with pensioners werecarried out, in addition to providing meetingspaces with the Pensioners Associations. Thiswas in order to deliver relevant information onservices and specific benefits afforded to themby Ecopetrol. Table 65 details the meetingsheld in 2012.Table 65Meetings with pensioners 2012CityNumber ofeventsAttendeesCartagena 1 320Barrancabermeja 2 1,126Bucaramanga 1 1,084Bogotá 2 843Total 6 3,373Source: Ecopetrol, Shared Service Center DepartmentPensioners meeting in Barrancabermeja, September 2012

260Gente Ecopetrol FoundationThe Gente Ecopetrol Foundation (GE, or EcopetrolPeople in English) was established on January 25,2011, by a small group of employees and pensionersfrom the company, who had the dream of joiningforces and wills for the benefit of the Colombiansmost in need. After nearly two years in operation,the GE Foundation ended 2012 with 1,044 membersamong contractors, employees and pensioners.To finance its projects and activities, theFoundation began 2012 with funds totaling$407,854,371, corresponding to the surpluses fromthe 2011 period, from its members’ donations.Additionally, during the year it also received thesum of $147,601,715 from its members.Beneficiaries of a house built by volunteers in Ciudad Bolivar, BogotaMeanwhile, in 2012 Ecopetrol provided theFoundation with the sum of $845,295,038, inreturn for managing the projects establishedfor victims of the severe rainy season, and anadditional $1,000,000,000 to opportunelymeet the specific needs arising from theDosquebradas emergency.VolunteeringThe GE Foundation has become the spacewhere the volunteering actions of Ecopetrolemployees and contractors can be realized. Each volunteering activity is performed byteams where Foundation members, theirfamilies, and the beneficiaries of the worksshare equally.In total, in 2012, 1,304 hours of volunteeringwere allocated, provided by 103 volunteers.The actions were aimed at building homes, athelping affected families from Dosquebradas,and at support for the Foundation’s variousmanagement committees: Communications,Financial and Projects. Ecopetrol supports thesevolunteering activities through the provision ofits employees’ working hours.The Foundation’s Work in 2012During 2012, the GE Foundation focused itsresources, both financial and volunteering, in thefollowing areas: housing, education and support forthe Dosquebradas (Caldas) emergency.HousingThe GE Foundation set a target to build 82 social housingunits between 2012 and 2013: 31 in 2012 and 51 in 2013.At the end of 2012, the target set for the year wasexceeded with the construction of 32 homes:• 25 for the vulnerable population of the districtof Vallecito in the Municipality of San Pablo,Department of Bolívar, corresponding to victimsof the severe rainy season, with mostly femaleheads of households.

Social dimension261• Seven for the vulnerable population in Bogotá,with the support of the Techo para ColombiaFoundation (Roof for Colombia Foundation).These houses were built by the beneficiaryfamilies themselves, which acted side-bysidewith Ecopetrol employees, contractors,pensioners and family members.• Each family, in addition to contributing the lot,has agreed to pay more than 30% of their homeand to participate in community developmentprograms and in some cases, to complete highschool or enter specific rehabilitation programs.• These units can not be sold or rented until theyoungest child of the family is of legal age.EducationWithin the education line, the GE Foundationhas set out to promote the schooling of children,providing them with spaces away from situationsof danger or violence, and supporting thedevelopment of young people identified as potentialcommunity leaders.In 2012 we worked with 476 children and theirfamilies in five municipalities in Magdalena Medio:Puerto Wilches, Cantagallo, Yondó, Sabana deTorres and Barranca, through recreational andsports activities such as football tournaments,celebrations for special dates, awareness raising onissues such as AIDS, first aid, parents workshops,and help for families to assist them in specialsituations of domestic violence or abuse.Support for DosquebradasTo help restore the assets of those affectedby the tragedy in Dosquebradas, Risaralda,the GE Foundation supported Ecopetrolin the timely support of affected familiesthrough the purchase and distribution of 56allocations of furniture and fixtures, whosecost amounted to $375 million.School equipment was also provided worth$120 million, and Empresa de Acueducto(Water Company) was supported with waterdispensing equipment, which was affected bythe emergency.In addition, the GE Foundation, througha cooperation agreement with Ecopetrol,provided Big Pass vouchers worth $106million to 203 affected people, and made ​contributions of $17 million to provideveterinary services to the pets of familiesaffected by the emergency.Finally, the Foundation is supportingeight affected families with a card usedfor shopping that is topped-up monthly,and can be used in a recognized chain ofsupermarkets.The support actions for the Dosquebradasemergency have been funded both withresources that have been provided byEcopetrol, under agreement with the GEFoundation, and with contributions frommembers of the Foundation.

262TestimonialHéctor Fabio OspinaResident of Dosquebradas“That morning of December 23,2011, I was sleeping in my humblehome in commune 10 of theMunicipality of Dosquebradas ,when suddenly I felt an explosionand then a flash filled the wholeplace with flame.My wife, who was with me in bedless than 60 centimeters away,was badly burned and had to behospitalized for 22 days, afterwhich she died. That day, I notonly lost the woman I had sharedmy life with for over 20 years, butmy family stability and many ofthe material things with which Ilived, and many of the materialsand tools I used in my daily workin the metalworking workshop.I heard that the Dosquebradastragedy left 33 dead and morethan 100 people affected, andto this day we have all receivedthe support of Ecopetrol. Inmy case, in addition to legalcompensation they gave to mydaughters, relatives of my wifeand me, right from the start thecompany has been concernedabout my medical rehabilitationsince I suffered burns to the faceand hands, and it has helpedme through the Gente EcopetrolFoundation and the Oleoductosde Colombia Foundation.Since the tragedy occurred,Ecopetrol has protected usand hasn’t let us go, thankGod: firstly, they helped uswith the provision of basic kitscontaining a stove, washer,mattress and essential utensilsfor the day-to-day.They have also concernedthemselves with providing uspsychological help, which Ithink is very important becausethe trauma left among all themembers of our home was huge,due to the loss of a wife andmother who meant a lot.Afterwards, through theChamber of Commerce, I havebeen part of the productioncapacity program, in whichEcopetrol involves people whohad a business or productionactivity, and ended up onthe street. In addition totechnical training, I was ableto make some improvementsto my workshop, which waspractically burned down afterthe emergency. And finally,the Oleoductos Foundationopened the possibility ofcontinuing the work that I’vealways known, and I havebecome their provider ofrepair supplies.Although my wife not beinghere is hard and our livesin the family have changed,we’ve tried to keep going,as have the vast majority ofneighbors who were victims ofthis terrible tragedy.”

Social dimension263Ecopetrol promotes respect for workersbelonging to the unions in the company:USO, Adeco and SindispetrolCollective labor relationsThe establishment of trade unions, freedomof association, collective bargaining andthe prevention of workplace harassment ordiscrimination due to union membership, are corevalues for the company.Freedom of associationand collective bargainingConsistent with its commitment to respect andtrust, Ecopetrol recognizes that freedom ofassociation of all employees, ensuring their right toform trade unions or employee associations, and tofreely decide if they want to be part of these bodies,and participate in the collective bargaining process.Similarly, the company promotesrespect for workers belongingto unions and their leaders, itprovides guarantees for freedomof action and prevents situations ofharassment or discrimination.Additionally, Ecopetrol permanentlymanages Ministry of Interiorrequirements aimed at obtainingthe guarantees necessary toensure respect for life in relation tocoexisting union leaders within thecompany (see Table 66).Table 66.Union organizations in EcopetrolUnion organizationsNumber of members2008 2009 2010 2011 2012Workers’ Trade Union (USO) 1,250 1,452 1,570 1,831 1,996Association of Managers and Technical Staff of thePetroleum Industry in Colombia (Adeco)94 111 532 505 474National Union of Workers of Operating Companies,Contractors and Subcontractors, within Servicesand Activities of the Oil, Petrochemical and RelatedIndustries (Sindispetrol)5 3 3 3 31Source: Ecopetrol, Vice Presidency of Human Talent

264Dynamic and productivelabor relationsUnder joint work with coexisting unionorganizations, in 2012 the process of buildingdynamic and productive relations wasstrengthened.WITH ADECOAgreement for regularmeetings and review ofsecurity issues for unionsites and presence on JointCommittees.In accordance with what was agreed in theCollective Bargaining Agreement effective inEcopetrol, 2009 - 2014, during the course of 2012various agreements with unions coexisting in thecompany were signed.For example, it was agreed to review the currentCollective Agreement, in order to ensuresustainable labor relations within normal laborparameters.WITHSINDISPETROLRatification of relationships oftrust with Ecopetrol, guaranteesand regular opportunitiesto raise issues for jointconstruction.The objectives of this review process were to:• Build a joint review plan for the agreementarticles on issues other than economic and wageitems, under normal labor conditions, to ensurecompliance with Ecopetrol’s labor law framework.• Ensure compliance with the agreementcommitment contained in Article 173, provisionalparagraph of the Effective Collective BargainingAgreement.Thus, scenarios were opened with Adeco andSindispetrol to listen to concerns regardingimplementation of its chapters, agreeing to thefollowing with such organizations:With the USOAn extra-agreement act wassigned on March 22, 2012,which contains bilateralagreements in 19 articlesof the Effective CollectiveAgreement. Likewise, otherextra-agreement acts weresigned on issues of theagreement’s positions gradestructure and salary issues,creating direct spacesfor open dialogue andagreement.

Social dimension265Claims and coexistence committeesDuring 2012, the provisions of Chapter XII of theexisting agreement text were fulfilled with regardto the Voluntary Arbitration Tribunal known as theClaims Committees, consisting of representativesof Ecopetrol’s management, the union and theMinistry of Labor. Of the 855 active claims atDecember 2012, a reduction of 32% (272 claims)was achieved, with a total of 583 active claimsremaining at the end of the year.Similarly, during the course of 2012, incompliance with Resolutions 652 of April 30,2012 and 1356 of July 18, 2012, issued by theMinistry of Labor, the Ecopetrol Committeeon Labor Coexistence was created. Thiscommittee, consisting of two representativesfrom the company and two from the workers,with their respective alternates, will hear issues ofworkplace harassment within the company.For the election of worker representatives, uponprior registration of the candidates concerned,a day for a secret ballot was set in which 3,313workers from all areas of the organization tookpart with their vote. For its part, Ecopetrol’smanagement chose its four representatives directly.Of the 855 activeclaims at December2012, a reduction of32% (272 claims) wasachieved, with a totalof 583 active claimsremaining at the end ofthe year.

266Industrial andprocess safetyThe main objective of industrial and processsafety management within Ecopetrol is to achievebetter operational performance, preventingand controlling occupational and operationalaccident losses, and establishing the protectionand control measures and actions necessaryto reduce hazardous events that may affectpeople, the environment, facilities or the serviceinfrastructure.Barrancabermeja RefineryTo achieve this objective, in 2012 Ecopetrolcontinued moving forward in implementingthe HSE plans, incorporating these into thecompany’s culture, through the following actions:Occupational healthThe aims of Ecopetrol’s Occupational HealthProgram are: To maintain and promote the healthof employees and their ability to work, to improvethe work environment, including health and safety,in order to maintain and promote the highestdegree of physical, mental and social wellbeingamongst employees in all their occupations, andto prevent diseases due to work conditions.To achieve this, activities and programs arecarried out on the assessment of risks to health,industrial health, industrial hygiene, ergonomics,occupational epidemiological surveillance andactive breaks.Occupational Health CommitteesThese committees are joint bodies composed ofemployee and company representatives, whoseaim is to promote and monitor compliance withEcopetrol’s occupational health programs.Within Ecopetrol there is one National JointCommittee, 12 Regional Joint Committees, and 34Local Occupational Health Committees, as follows:• Joint Committees on Occupational Health(COPASOS)The joint committees are advisory bodies formedto promote and monitor compliance with theRegional Occupational Health Programs. Theyinspect, monitor and evaluate the NationalPlan and the Regional Occupational Programs,propose adjustment measures and makerecommendations thereon.• Local Occupational Health Committees(COLOSO)The Local Occupational Health Committees area mechanism for participation so that employeerepresentatives can collaborate with Management,in areas of their jurisdiction, in actions for thepromotion, prevention and control of occupationalrisk factors, in measures and solutions within their

Strengthening andincorporation ofbest practice in HSEleadership and culturein three hierarchicallevels (strategic, tacticaland operational) of theorganization.Action for theImplementationof HSE PlansDefining the processof implementationand application of theoperational disciplinepractice for HSEaspects.HSE ManagementControl Structurethat ensures theconnection of targetsand objectives from thecompany’s strategic tothe operational level,achieving synergiesand effectiveness in theimplementation of theplans.Influence toward changingbehaviors to achieve theconviction that lossescan be avoided, achievingsustainable levels of highHSE performance.Identification and actionin critical teams, criticalpositions and criticalprocedures.Systematicmeasurement ofproactive and reactiveindicators related toHSE management.

Health and Safety inthe BarrancabermejaRefinery’s laboratory.remit, or otherwise, proposing what is necessary tothe competent authorities.Additionally, the company has four other types ofcommittees involved in occupational health:• National and RegionalCommittees on Epidemiological SurveillanceIn the company there is one NationalCommittee and five Regional Committees onEpidemiological Surveillance, whose main rolesand responsibilities are:• Plan, coordinate, direct and control theoperation of the epidemiological surveillancesystem.• Monitor and control the proper and timelymanagement information collected by the system.• Conduct and provide technical assistance forthe operation of the surveillance system.• Assess changes in the epidemiological profileof Ecopetrol S.A.• Perform the annual scheduling of activitiesbased on the findings of the previous period.• Monitor compliance with the scheduledactivities.• Lead the educational process of promotionand prevention for epidemiologicalsurveillance systems at all levels of theorganization.• Propose concrete actions for reducingindicators of absenteeism, morbidity, andenvironmental intervention indicators,or other indicators under the company’ssurveillance system.

Social dimension269• Regional Committees and NationalCommittee on Comprehensive RehabilitationIn Ecopetrol there is one NationalCommittee and five Regional Committees onComprehensive Rehabilitation, whose mainroles and responsibilities are:indicators that support theimplementation thereof and ensureimprovement plans.• Promote this practice throughout thecompany to strengthen the culture ofself-care.• Conduct monitoring with human talentbusiness leaders in cases of employees withtemporary constraints.• Review cases of permanent constraints andpotential relocations.• Define change of role if required and ensurethe education and training process.• Refer the case to the national level in theevent that there is no possibility of relocationwithin the region, either because there are novacancies or they do not pass the selectionprocess.• Evaluator interdisciplinary committees(DOES and CPCL)In Ecopetrol there are five evaluatorinterdisciplinary committees at a regional level,which must determine the source of healthevents (DOES) and qualify the loss of ability towork (CPCL) for employees, pensioners andbeneficiaries of Ecopetrol.• HSE Excellence Committee:Occupational Health SubcommitteeUnder the HSE excellence program is theOccupational Health Subcommittee, whoseobjectives are:• Validate the guidelines on OccupationalHealth in Ecopetrol.• Align actions to improve the OccupationalHealth process.• Perform timely monitoring of performanceAbsenteeismAbsenteeism in Ecopetrol is classified according toits cause amongst common disease, occupationaldisease, workplace accident, accident outside ofwork, sporting accident, special health leave anddisease of occupational concern.For occupational purposes, diseases ofoccupational concern and occupational diseasesare described.Diseases of Occupational Concern(DOC): are defined as any temporary orpermanent pathological condition that hasbeen diagnosed by a health professional whosuspects that their origin is related to the typeof work performed by the employee, but thathas not been classified as such. In the past fiveyears, the diseases of occupational concern thatare most prevalent correspond to diseases ofmusculoskeletal origin, and among them the mostcommon disorder is lower back pain (62%).The cumulative frequency indicator for diseases ofoccupational concern (DOC) in 2012 was 8 eventsper million man-hours worked. The frequency in2009, 2010, 2011 and 2012 can be seen in Figure 45.

270Figure 45.Cumulative frequency indicator (FI)* for Diseasesof Occupational Concern35302520151050292009282010* The frequency indicator (FI) for absenteeism is calculated as the number ofabsence events per million hours worked.Source: Ecosalud ocupacional 201222201182012Target2012* The frequency indicator (FI) for absenteeism iscalculated as the number of absence events permillion hours worked.Frequency of general health diseasesand diseases of occupational concernIn 2012, 96% of absenteeism was due to nonoccupationaldisease, and of that 57% was due tocommon disease. 3% of cases were due to diseasesof occupational concern and 0.15% due to qualifiedoccupational disease.Table 67 shows the causes of absenteeism due togeneral health and absenteeism due to disease ofoccupational concern.AccidentsThe occupational accident rate measures thenumber of accidents that have occurred onoccasion of or because of work, and that generatea loss of time equal to or greater than one day. Thecriteria for determining whether or not somethingis an occupational accident corresponds to thatdetermined by law, the internal labor regulationsof Ecopetrol and that determined by the ANSI(American National Standard Institute) sectionsZ-16.1 and Z-16.2. In Ecopetrol this indicatorincludes both its direct employees, as well as thoseof contractors and subcontractors.Figure 46.Occupational Accident Frequency Rate - Employees andcontractors5.77In 2012 there were 115 accidents amongst directemployees and contractors, which represents acumulative accident frequency rate of 0.79 accidentsper million man-hours worked. This contrasts with the147 accidents in 2011, with an accident frequency rateof 1.02 per million man-hours worked, representing adecrease of 23% in the accident rate (see Figure 46).2.631.821.731.241.551.020.7820052006200720082009201020112012Source: Ecopetrol, Vice Presidency of HSE and Operational Sustainability

Social dimension271Table 67Absence due to general disease and DOCCauses by general disease % Causes by DOC %Respiratory system 19 Musculoskeletal 82Digestive apparatus 18DigestiveapparatusMusculoskeletal 16 Nervous system 6Circulatory System 15Diseases of the eye andadnexa13RespiratorysystemOthers 19 Others 3Total 100 Total 100Source: Ecopetrol, Vice Presidency of HSE and Operational Sustainability63Among assurance actions to improveabsenteeism rates, action planswere carried out, adjusted to theepidemiological behavior of eachregion and business. Also, ongoingcampaigns were promoted for handwashing, vaccination and fitness.This is in addition to educationaland preventive activities to achievehealthy lifestyles and self-care in eachworker. The percentage of campaigncoverage was 76%.Direct staffIn 2012, 33 accidents were reported in relation todirect employees, compared to 23 accidents in 2011,corresponding to a cumulative occupational accidentfrequency rate of 1.37 in 2012, higherthan the cumulative occupationalaccident frequency rate (1.05) in2011(see Figure 47).Figure 47.Occupational Accident Frequency Rate - Direct staffResult by monthCumulative resultTargetNo. of accident victims / Million M-H worked1.051.051.001.621.621.931.782.361.993.002.241.492.091.830.52 0.521.651.991.690.471.561.471.550.981.501.370.861.000.000.00Real2011Dec-11Jan-12Feb-12Mar-12Apr- 12May-12Jun-12Jul-12Aug-12Sep-12Oct-12Nov-12Dec-12Source: Ecopetrol, Vice Presidency of HSE and Operational Sustainability

272The rate for contractors showeda decrease of 34% in 2012ContractorsMeanwhile, in 2012, 82 accidents were reportedthat incurred lost time involving contractorpersonnel, with a cumulative occupationalaccident frequency rate of 0.68. This representsa decrease of 34% compared to 2011,when a cumulative occupational accidentfrequency rate of 1.01 was recorded (seeFigure 48).Figure 48.Occupational Accident Frequency Rate -Contractor and subcontractor personnel1.47No. of accident victims / Million M-H worked1.011.000.210.210.860.510.830.650.790.600.75 0.76 0.750.310.690.71 0.71 0.710.69 0.69 0.690.410.660.860.680.86Real2011Jan-12Feb-12Mar-12Apr- 12May-12Jun-12Jul-12Aug-12Sep-12Oct-12Nov-12Dec-12Source: Ecopetrol, Vice Presidency of HSE and Operational SustainabilityThe occupational accident severity index saw adecrease in 2012 in relation to the previous year,both for direct and contractor personnel, closingwith a severity index of 20 days lost per millionhours of exposure for the direct population, and 11for the contractor population.The occupational accident severity index,which relates the severity of injurieswith lost work time, reached a combinedresult in 2012 (direct employees andcontractors) of 13 days lost per millionhours of exposure (see Figure 49).

Social dimension273Figure 49.Occupational Accident Severity or Loss IndexDirectContractorsCombined10009009438007006006277396555004004583914203503002001006330 24 26159107 1139386 7518 27 15 20111302005 2006 2007 2008 2009 201020112012Source: Ecopetrol, Vice Presidency of HSE and Operational SustainabilityDuring 2012 there were no fatalities to our direct andcontractor personnel, demonstrating a substantialimprovement in comparison with 2011.

274In 2012 there was a 16% reduction in process safetyevents according to the API 754 criteria of theAmerican Petroleum InstituteProcess safetyProcess safety aims to improve operationalperformance, preventing and controlling theoccurrence of catastrophic events such as fires,explosions, leaks or spills of hazardous substances ortoxic chemicals, establishing the necessary measuresbased on elements of HSE management to reducethe potential impact of these events on people, theenvironment, facilities and the services infrastructure.For better understanding, they are divided intoprocess safety events and incidents.Process safety eventsProcess safety events are product leakagesabove the defined threshold, including fires andexplosions.During 2012 there were 16 process safetyevents according to the API 754 criteria ofthe American Petroleum Institute, i.e. productleakages above the defined threshold, but noexplosions or fires were reported. Figure 50shows a reduction of 16% in comparison withthe 19 events reported in 2011, and of 19%compared to the 21 recorded in 2010.Figure 50.Process Safety Events according to API 754 criteria*21 19 1614163115ExplosionsFireProduct LeakageProcess safety events2010 2011 2012*According to American Petroleum Institute API 754. Also includes pipeline accidents.Source: Ecopetrol, Vice Presidency of HSE and Operational Sustainability

Process safety incidentsOn the other hand, incidents relate to operationalaccidents involving the unplanned or uncontrolledloss of primary containment in relation tochemicals above the defined threshold, permillion man-hours worked.In 2012, this index was below the maximum limitand went down by 15% compared with the resultof 0.13 obtained in 2011 (see Figure 51)Non-computable events and incidentsIn 2012 there were 1,086 leaks, 52 fires and 52explosions that were not computable under theProcess Safety Incident Index as they did notexceed the thresholds defined by API 754criteria. These 1,143 processes safety eventscorrespond to an increase of 31% comparedto 872 non-computable events in 2011.In 2013, Ecopetrol will focus on managingthese control failures and minor leaks inorder to avoid the materialization of majorevents that could affect stakeholdersor compromise business continuity, asevidenced by the annual reduction in thenumber of computable events and thesustained downward trend in the processsafety index since 2009.Figure 51.Process safety incidents index*0,310,160,130,112009 20102011 2012* According to American Petroleum Institute API 754. Also includes pipeline accidents.Source: Ecopetrol, Vice Presidency of HSE and Operational Sustainability

276Human rights

Social dimension277In 2009 Ecopetrol, made the decision to take a holistic approach tohuman rights through the approval of a Guide on Human Rights andadherence to United Nations Global Compact (Global Compact). Sincethen, the company has publicly assumed the following commitments:01Operate within theframework of respectfor human rights (HR),domestic law andinternational agreements.02Reject and publiclycondemn any abuseor violation of humanrights or internationalhumanitarian law (IHL).03Call upon a thorough andimpartial investigation intoreported abuses.04Work with aprecautionaryapproach toenvironmentalchallenges.Management of human rightsThe Guide on Human Rights contains a numberof principles and rights that cover employees,contractors and partners:• Freedom of association and collective bargaining• Elimination of forced and compulsory labor• Abolition of all forms of child labor• Elimination of discrimination in respect ofemployment and occupation• Fair wages and favorable and adequate workingconditions• Rights of the vulnerable population and ethnicminorities• Collective rights and environmental rights• Elimination of corruption in all its forms• Physical security of operations within aframework of respect for HR and IHLIn order to ensure the commitmentscontained in the Guide and the GlobalCompact principles, Ecopetrol has createdplatforms and tools for management, suchas the Human Rights Committee, the TacticalPlan on HR and an indicator of compliancewith this plan.

278The results of the compliance indicator forthe Tactical Plan on HR show sustainedcompliance above the target setIn early 2012, the company conducted a reviewexercise for the Tactical Plan on HR. As a result,two tactical objectives were defined:• Ensure the due diligence and traceabilityof Ecopetrol’s operation under respect forhuman rights.• Add value through the promotion of humanrights in the company’s operating environmentsThese objectives, in turn, contain strategic areasthat guide the definition of the activities, theirdeliverables and compliance milestones, as can beseen in Table 68.Table 68Strategic profile of the Tactical Plan on HRTactical ObjectivesStrategic AreasHuman rights risk management and analysisEnsure the due diligence and traceability of Ecopetrol’soperation under respect for human rightsSystem for grievances, complaints and claims inhuman rightsPerformance assurance for the value chainSecurity and human rightsSupport to public institutional strengthening inhuman rightsHuman rights dialogue with stakeholdersAdd value through the promotion of human rights in thecompany’s operating environmentsPromotion of multiculturalismDisability and labor inclusionPromotion of the rights of children andadolescentsFreedom of association and collective bargainingSource: Ecopetrol, Secretary General

Social dimension279To monitor the implementation of the tacticalplanning for human rights management, Ecopetrolhas a Tactical Plan Compliance Indicator, whichis measured on a quarterly basis. The indicator’sresults show sustained compliance above thetarget set, since 2010, when it began to beimplemented (see Figure 52).Human Rights MaterialityBased on all the studies conducted, the informationgathered, the opinions expressed, the concernsanalyzed, that established by the GRI G3.1methodology and especially the Global Compactprinciples, Ecopetrol’s human rights managementwas carried out in 2012 around six major areas,which will be set out in this sub-dimension:Figure 52.Compliance indicator for the Tactical Planon HR - Cumulative results100%50%102 %104 %107 %Target: 90%RealPlan* Due diligence in human rights• Human rights monitoring system• Report on human rights cases• Performance assurance for the value chain• Human rights in contracts with partners• Security and human rights* Creating value through the promotion of humanrights in the company’s operating environments:• Promotion of multiculturalism• Disability and labor inclusion• Promotion of the rights of children andadolescents• Freedom of association and collectivebargaining* Training and dissemination on human rights02010 2011 2012Source: Ecopetrol, Secretary General* Voluntary initiatives• Global Compact• Guías Colombia• CME – Security and Human Rights

280A Special Cases Committee was created that analysesspecific situations identified in the monitoring process,which are assessed with criteria from a case analysis andverification matrix designed in EcopetrolDue diligence in HRAnalysis and managementof human rights risksIn order to ensure the analysis and managementof human rights risks, as well as to align itsprocesses and procedures with that set outin the Guiding Principles for Business andHuman Rights, adopted by the United Nationsin 2011, Ecopetrol is conducting a study of risksassociated with the realization of the differentEcopetrol operating line phases, with an emphasison projects located in the departments of Meta,Casanare and Magdalena Medio.In 2012 progress was made in interviews withcompany employees, required for detailedknowledge of internal processes, and additionallythe field study on operations in MagdalenaMedio was completed. Furthermore, a two-wayanalysis was conducted on human rights risksassociated with Ecopetrol operations in Colombiaand the formulation of recommendations forincorporating human rights risk analysis into thecompany’s risk management model.The work will continue in 2013 with field visits tothe high plains, the detailed diagnostic of the risksand impacts of operations in established areas,recommendations for risk management, and theassurance of the company’s internal capabilitiesthrough training workshops.As a result of this study, in 2013 the companywill have a map of human rights risks and anassurance plan for managing the identified risks,which shall be joined up with the company’sexisting risk management model.Human rights monitoring systemIn order to comply with human rights duediligence, since 2011 Ecopetrol has beenadjusting its complaints and claims systemthrough the clear definition of actions thatconstitute human rights violations in thesystem’s existing matrices, in order toadequately address all stakeholders that maybe affected by the company’s operation andmanagement, in relation to their rights.In 2012, Ecopetrol gave a wider scope to thisactivity through the design of a process ofongoing monitoring and analysis of the risksand impacts on human rights by Ecopetrol’soperations and its value chain.To achieve this, it defined the various sourcesof information that support the identificationof specific cases of suspected human rightsviolations and trends in the perceptions ofstakeholders regarding Ecopetrol’s performancein respect of human rights.To this end, situations were defined that couldgenerate a suspected violation of each of theGlobal Compact principles, and a classificationmatrix was defined that facilitates both thecollection of information from the tools availablefor complaints, requests and claims, as well as indepthanalysis of the situations identified in theprocess. After completion of the above exercise,it is expected that in 2013 the company will havemore precise and defined reports on complaintsabout suspected breaches, impacts or violationsof human rights by Ecopetrol.

Social dimension281Additionally, a Special Cases Committee wascreated that analyzes specific situations identifiedin the monitoring process, which are assessed withcriteria from a case analysis and verification matrixdesigned in Ecopetrol. This matrix is based on theidentification of the injured party or victim of thesuspected violation, the perpetrator or the allegedviolator of the right, and the right that the victimalleges as violated.The Special Cases Committee reports on itswork on a monthly basis to Ecopetrol’s HumanRights Committee, which takes the corrective andmitigation measures, and designs strategies toensure the continuous improvement of Ecopetrol’smanagement regarding respect for human rights.Reporting of human rights casesDuring 2012, seven situations that allegedly violated the rights of stakeholderswere analyzed in the Special Cases Committee; however, after the analysisthereof, no specific acts were identified that could be classified as a violation.Nevertheless, issues were identified that require improvement strategies forexisting processes, which will form part of the Tactical Plan on Human Rightsfor the 2013-2016 term.In addition, the company also has a monitoring process that tracks the specificcomplaints of alleged human rights violations related to the Armed Forcessupporting the company’s security, as well as the workers of private securitycompanies . In 2012 there were no reported cases in this regard.Among the cases handled by the Ethics and Compliance Unit, in 2012 therewere no issues related with any kind of discrimination within the company.Similarly, the Disciplinary Control Office related did not take forward processesrelated with this type of behavior during the reported period. Neither were therehuman rights complaints reported in the undertaking and management of thecompany’s contracts.In terms of harassment complaints, according to data provided by the VicePresidency of Human Talent, in 2012 two processes of harassment werehandled, of which one was closed by agreement between the parties, onSeptember 19, 2012, and the other is pending a conciliation hearing.

282Human Rights incontracts with partnersIn previous Ecopetrol partnership contracts therewere no clauses specifically devoted to humanrights. Nevertheless, the general obligationwas stipulated for the partner and operator toadvance the various activities in compliance withthe constitutional, legal and regulatory frameworkin force in Colombia.Within recent joint operation agreements withpartners, clauses have been included in whichcompliance with international human rightsinstruments is agreed.Additionally, in order to ensure the creation ofrelationships of trust and mutual benefit withstakeholders, in 2011 Ecopetrol worked onthe development of guidelines to ensure themanagement of Ecopetrol’s relations with thesurroundings, both in direct operations andwith its partners. These guidelines included thatrelated to human rights within eleven key issues,which were reported in 2012.Security and human rightsEcopetrol has been taking forward the Programfor the Implementation of the Voluntary Principleson Security and Human Rights since 2009.In undertaking this program, Ecopetrol carriedout the following activities in 2012:• Relations with Armed Forces / Plan PadrinoUnder the agreement signed with the Ministryof Defense, Ecopetrol entered into Plan Padrinowith the Army’s Family Leadership, which aims tosupport activities in welfare, health rehabilitationand job training for soldiers that have becomedisabled while provided the control and securityservice for the company’s oil infrastructure.The support provided in the Plan consistsof comprehensive care for both woundedand disabled soldiers and their families,including: the purchase of hospitalization kits,specialized psychotherapeutic care, provisionof orthotics not covered by the CompulsoryHealth Plan, a reserve fund for special casesand basic, technical and technological training.• Key Practice for Implementationof the Voluntary Principles on Securityand Human RightsAs a strategy to develop knowledge and skillsin workers and employees from the company’sPhysical Security Department, it was decidedthat Human Rights was to be established asone of the key practices in this area. To dothis, a training program was defined, whichin its first year reached 80 people, includingprofessionals and analysts, corresponding toValue chainperformance assuranceIn order to promote effective performancemanagement that respects human rights withinthe value chain, activities were undertakento promote human rights among affiliates,contractors and partners.The first human rights workshop was carriedout with affiliates, which reviewed the contextand international regulatory framework on theissue of human rights and business, as well asthe results of a self-assessment conducted ​priorto the exercise, and the actions to be jointlyundertaken were defined.

Security personneltrained in humanrights and IHL82.8%82.8% of the Department’s staff that hadthis commitment assigned to them. All weretrained in human rights, IHL and Company.The tools used for the training included theinternational methodology known as theImplementation Guidance Tool (IGT), aimedat developing risk analysis exercises insecurity and human rights.• Due diligence procedureIn order to ensure timely and appropriatemanagement in relation to complaints andpetitions that may arise from differentEcopetrol stakeholders for suspected humanrights violations or breaches of internationalhumanitarian law by members of the ArmedForces supporting Ecopetrol’s security orby contracted Private Security, the PhysicalSecurity Department defined a procedurethat established the need to identify,assess, prevent and mitigate the risksassociated with such situations.This due diligence process recognizesthe importance of conducting ongoingmonitoring of the human rights situation inthe environment, as well as the importanceof using existing channels for the generationof traceability in situations whereimprovement opportunities and specificactions are identified.With production asset partners, the selfassessmentsurvey was also promoted, whichidentified opportunities to initiate an exchangeof best practices on the issue of human rightsand business.Finally, with respect to contractors, workwas done to capture a baseline of currentmanagement regarding assurance on theissue of respect for human rights within thisstakeholder, and a workshop was carried outwith experts to identify gaps in relation to bestpractices to define a plan of activities to reducethese.Human Rights Workshop conducted withCorporate Group companies

284As part of the Voluntary Principles on Security and HumanRights, in 2012 awareness was raised in IHL and human rightsamong a total of 567 private security contractors• Pilot for the Implementation of Indicatorson Voluntary Principles on Securityand Human Rights:The Voluntary Principles Pilot that is underwayin Magdalena Medio, in partnership withOccidental de Colombia, with the supportof International Alert, completed its firstphase in March 2012 with the followingoutputs: identification of the baseline, gapclosure plan proposal, and the action plan forimplementation of this plan.Under the action plan, work was done onstrengthening communication and trainingplans in Human Rights, IHL and VoluntaryPrinciples for stakeholders, and a first reviewwas carried out of the gaps in risk analysis andsocial impacts in the Magdalena Medio Region,in light of the Voluntary Principles.Similarly, awareness raising on human rightswas conducted for private security contractorsin the Magdalena Medio Region, in theBarrancabermeja Refinery and the followingfields: Cantagallo , Puerto Wilches, Casabe, LaCira, Llanito, Lizama and Cicuco, for awarenessraising among a total of 567 people during 2012.Landminerisk managementDuring the second half of 2012 anagreement was signed between theAdministrative Department of thePresidency of the Republic, the Associationof Petroleum Foundations, the PresidentialProgram for Comprehensive Action againstAntipersonnel Mines and Ecopetrol, aimedat developing a project for the preventionand management of risk from the presenceof landmines, unexploded ordnance andexplosive devices in the company’s areas ofinfluence.In 2013 the following activities will becarried out:

Social dimension285Creating value through thepromotion of human rightsPromotion of multiculturalismEcopetrol’s guidelines on relations with ethnicgroups fall within the framework of corporatevalues ​aimed at protecting the environment andthe integrity of individuals and communities, inaccordance with universal and specific humanrights recognized for ethnic groups.Development of a procedure forthe management of risk fromthe presence of landmines,as well as tools for itsdissemination.Training for members ofcommunities in high risk areasthat are Ecopetrol areas ofinfluence.Training for Ecopetrol employeesand contractors that can performthe role of information multipliers,thanks to their role and functionwithin the company.Training for employeesand contractors at riskfrom mines.Representatives ofthe community of SanGabriel, Putumayo.Ecopetrol recognizes that persons belonging tothese ethnic groups and cultures have all the rightsstated in the Universal Declaration of HumanRights, 1948. It also acknowledges that thesegroups, as minorities, have the rights set forth in theUnited Nations Declaration of 1992 on the Rights ofPersons Belonging to National or Ethnic, Religiousand Linguistic Minorities.In recognition and support to existing internationaltreaties and agreements, Ecopetrol recognizes andrespects:

286Documents for management with ethnic groupsIn order to ensure the incorporation of the above guidelines within business processes, during 2012 thefollowing documents were developed and published:General guide to management with ethnic groupsIntercultural Guidelines for Relations with EthnicGroupsDeveloping Intercultural DialogueCharacterization of Ethnic GroupsRelations with Ethnic GroupsCheck List for Cultural Tripartite DialogueCauses of Conflicts between Ethnic Groups andEntitiesStrategies for Conflict Managementand ResolutionStanding Intercultural Bureauof the Hydrocarbon SectorTopics for Training EventsChecklist for the Characterization of IndigenousCommunitiesGeneral Characterization of Ethnic GroupsGuide for the Development of Relations Projectswith Ethnic GroupsThe value of the distinctiveness thatidentifies ethnic groups, for which it isnecessary to abide by and promote theirrights, individual and collective rights,and fundamental freedoms, as well asorganizational, economic and socialstructure.The right to the protection and preservation oftheir customs and practices.The right of ownership and possessionover the lands they traditionally occupy, inaccordance with the recognition thereof that theGovernment has made consistent with existingnational laws.The special importance to the cultures andspiritual values of national ethnic groups inrespect of their relationship with the lands orterritories, or both, as applicable, that theyoccupy or otherwise use, and in particular thecollective aspects of this relationship.The right to free, prior and informed consultation,through appropriate procedures and in particularthrough their representative institutions. Theseconsultations that should be undertaken ingood faith and in a manner appropriate tothe circumstances, with the aim of reachingan agreement or achieving consent with theproposed measures.The right to have a share whenever possible,in accordance with that prescribed by nationallegislation, in the benefits arising from theactivities of the exploitation of hydrocarbonresources from their lands.The right to receive fair compensation for anydamage they may suffer as a result of activitiesthat the company may advance in theirterritories.The right to decide their own priorities inrelation to the development process, in so faras this affects their lives, beliefs, institutionsand spiritual well-being and the lands theyoccupy or otherwise use, and to control to theextent possible, their own economic, social andcultural development, in accordance with thelegal framework in force in each country.In virtue of the above, for the development of theirprojects, operations, the significant expansion ofthese, or the decommissioning of facilities withinthe territories belonging these groups, Ecopetrolcommits to:• Recognize the existence of ethnic groups.• Identify and understand ethnic groups.• Respect ethnic groups.• Give priority to their distinctiveness in its projectsand operations.

Social dimension287• Respect traditional knowledge and biodiversity• Assist in initiatives for the promotion of ethnodevelopment• The development of intercultural dialogue as abasis for establishing sustainable relations• The search for agreement as a purpose ofrelations and prior consultation processesPrior consultationsEcopetrol undertakes all its consultationprocesses in strict adherence to the followingphases:• Approach and preliminary assessment.• Official verification of the presence ofindigenous communities and legallyconstituted territories.• Preconsultation• Establishment of the consultation, informationand training.• Identification, analysis and coordinationof impacts and management and controlmeasures.• Meeting on preliminary agreements.• Formalization.• Monitoring and support for the implementationof agreements.• Closing of the consultation process.From the beginning of the prior consultation, anduntil its close, the process is accompanied by theState monitoring and oversight bodies. In 2012,62 prior consultation processes were undertaken,as part of the development of eight explorationprojects and one electrical interconnection projectin the northeast of Putumayo. For the carrying outof prior consultations with the Wayuu communitiesfrom the Upper and Middle Guajira Reserves,community groups have been established,considering the good relations between them, thecloseness and in some cases, kinship.With the Orinoco and Tolima Reserves, meetingswere held with individual Reserves. In the case ofthe Samichay A 2D project, work was done with thethree reserves within a single consultation space.Although none of the prior consultations wereconcluded, the formalization stage was completedwith the Wayuu communities who participated in theprior consultation for the Silvestre 2D seismic; withthe La Teófila, Coropoya and Jericó Consaya Reservesfor the Samichay A 2D seismic, and with the Sikuaniy Piapoco de Rios Tomo y Weberi, Punta Bandera,Valdivia, La Esmeralda, Kawaneruba, Muco Mayoraguaand Muco Guarrojo Reserves for the CPE-4 2D seismicproject. Additionally, the Ministry of Interior was askedto begin prior consultations for the Sinú San JacintoSur -1 2D Seismic and for the drilling of developmentwells Sucumbios 4 and 8.Tables 69 and 70 set out the prior consultation projectsinitiated in 2009, 2010 and 2011, which continued in2012 and have not been concluded and are awaitingcontinuation in 2013.Conflicts arisingwith ethnic communitiesIn the municipality of San Jacinto Bolívar, two blackcommunities expressed their dissatisfaction thata prior consultation process had not been carriedout with them for the Sinú San Jacinto Norte - 4Seismic. The communities were located at oneof the far ends of the seismic and there was anomission by the Ministry of the Interior in failingto perform the consultation with them. In 2011(October and November) approaches were made tothe community in order to listen to them and agreeactions to be carried out.In 2012, two projects were agreed with thesecommunities in order to compensate them. Inaddition to the above, during the year there were noincidents of ethnic community rights violations.Intercultural and mutualunderstanding dialogue 2012With the participation of traditional authorities, legalrepresentatives and leaders of the indigenous andAfro-Colombian peoples and organizations, the theIntercultural and Mutual Understanding Dialogues2012 were held in Puerto Asis (Putumayo), Coveñas(Sucre) and Cali (Valle del Cauca), which alsoincluded representatives of the national, regionaland local government, monitoring and oversightentities, and other companies from the sector.In the framework of these spaces, participants fromall three sectors talked about their thinking, originsand world view, as well as the concerns and issuesof mutual interest to the government, oil companiesand ethnic groups.

288Table 69Projects with prior consultation before 2012ProjectEthnic communityMunicipality/DepartmentStart dateEnd dateNortheast Putumayo ElectricalInterconnectionNasa communityPuerto Caicedo,PutumayoJune 2009OngoingSilvestre 2D Seismic Acquisition Project239 WayúucommunitiesRiohacha, Guajira November 2010 FormalizedCPE-4 Seismic Acquisition Project8 Sikuani indigenousreservesCumaribo, Vichada July 2011 FormalizedRC-9 Exploratory Drilling Area105 WayúucommunitiesManaure, Guajira July 2011 OngoingToldado 3D Seismic Acquisition Project8 Pijao indigenouscommunitiesOrtega, Tolima August 2011 OngoingSource: Ecopetrol, Vice Presidency of HSE and Operational SustainabilityTable 70Prior consultations initiated in 2012ProjectEthnic communityMunicipality/DepartmentStart dateEnd dateSamichay A Seismic Acquisition ProjectReserves: UitotoCoropoya;Coreguaje JericóConsaya; ResguardoCoreguaje La TeófilaSolano, Caquetá March 2012 FormalizedMago Norte Exploratory Drilling AreaVencedor PiriríReservePuerto Gaitán, Meta November 2012 OngoingRC-12 “Camuro” Oriental and OccidentalSeismic Project in partnership with Repsol36 WayúucommunitiesUribia, La Guajira December 2012 OngoingSource: Ecopetrol, Vice Presidency of HSE and Operational Sustainability

Social dimension289Among other issues, the following werediscussed during this event: the impactof industry, recognition of indigenouscommunities, land, labor participation, newblocks and oil projects, prior consultation andthe need to bring dialogue to the grassroots . Inthe end, the parties agreed on the importanceof continuing the dialogue, enriching theagenda, establishing people in charge andmechanisms for enforcing them in the future, withthe tools and resources needed for the monitoringand operation thereof. Also, they recommendedexpanding participation to other governmententities, human rights organizations, national andinternational indigenous organizations, amongothers. Table 71 lists the intercultural dialoguesconducted ​by the company in 2012.Table 71Intercultural and mutual monitoring dialogueDate Location Number of attendees Participant peoplesNovember 27 to 29Puerto Asís(Putumayo)87 peopleEmbera, Pastos, Awa, Cofán, Sionas, Pijaos, NasaIndigenous PeoplesDecember 5 to 7 Coveñas (Sucre) 86 people Zenú Indigenous PeoplePacífico Cimarrón Community CouncilRío Mayorquín Community CouncilRío Cajambre Community CouncilDecember 11 to 13 Cali (Valle del Cauca) 57 peopleLimones Community CouncilVereda la Esperanza Community CouncilRío Naya Community CouncilAlto and Medio Dagua Community CouncilSource: Ecopetrol, Vice Presidency of HSE and Operational Sustainability

290TestimonialHoovert Carabalí PlayoneroRepresentative of the blackcommunities of the Pacific“The Pacific region contains 5%of all the country’s black people,encompassing territories that covermore than six million hectares.I am the representative of my blackpeople from the Colombian Pacific,and specifically the black peoplefrom Bahía Málaga, Municipality ofBuenaventura, department of Valle.We have a Community Councilthat represents the interests of 157families and 613 people. I have ledthese communities for over twodecades, from when I took an activepart in the National ConstituentAssembly, which was the greatcitizen movement that gave rise tothe Constitution of 1991.As a development of theConstitution, Law 70 of 1993 cameinto being, which has enabledus black people to claim legaladjudication from the State, ofthe territories in which we havebeen settled for two centuries,generating conservation, life,culture, joy, peace, food andeverything that is part of ourcultural universe.That law gave life to communitycouncils made ​up of ancestralcommunities to manage the searchfor projects on development, andenvironmental and social welfarefor their people. We are nowachieving this, and that makes usstakeholders who own territoriesin which there are many futurepossibilities for mining and oilresources.Relations with Ecopetrol had neverbeen either close or very fluid, eventhough some of our territoriesin Valle del Cauca are an areaof ​influence of the pipeline thattransports fuel between Yumbo andBuenaventura.However, this year there havebeen significant rapprochement,especially in the context ofthe mutual understandingdialogues promoted by Ecopetrolthat enabled more than 50representatives from19 CommunityCouncils in the region to expressour expectations and needs.Thanks to the commitment,seriousness and level ofresponse that Ecopetrol’s SocialManagement team gave to thesedialogues with our communities,we were able to structure what,in future, will be the road map forthe company’s relations with allAfro communities anywhere in thecountry.These dialogues have become amilestone for Colombia’s blackpeople, because it’s the first timea company has sat down withblack communities to discuss thepossibility of joint progress around oilproduction or business activity. Wethink it’s great because it is openingthe possibility of fruitful dialoguebetween the parties!We have been able to appreciate thatEcopetrol is a reputable companythat is betting on social andenvironmental sustainability in theplaces where it has operating or oiltransport areas”

Social dimension291Project Orígenes (Origins)During the lastquarter of 2012, the agreement with Artesanías deColombia (Colombian Crafts) known as Orígenes wascontinued, which promotes the strengthening of thecultural identities of ethnic groups through actionsthat are consistent with their life plans and focusedon strengthening their craft traditions.The project, which operates nationally andincludes 34 indigenous and Afro-descendantgroups, focused on four components: Humandevelopment, design and development ofhandicrafts, technology improvement andbusiness management.Anthropologists and designers visited thecommunities to continue strengthening theirhandicrafts, based on their traditional knowledgeand ancestral techniques. This made it possiblefor there to be 19 exhibitors at the ExpoartesaníasFair 2012 (handicrafts expo), held in Bogota inDecember, increasing representation relative to2011, when there were 10 exhibitors.Disability and labor inclusionOn May 10, 2011, Colombia ratified theConvention on the Rights of Persons withDisabilities, adopted by the General Assemblyof the United Nations. This means that thecontents of the Convention have been formallyincorporated into Colombian law and are ofmandatory compliance for our country’s publicand private institutions.Ratification is a critical step to advance theassurance and protection of the human rightsof the disabled population in Colombia, andrepresents the best road map for public entities,civil society organizations, people with disabilitiesand society in general to ensure the enjoyment ofthe rights of this population. Understanding theimportance of this instrument for the country,Ecopetrol as mixed-economy company that iscommitted to building a social state based on therule of law and the country’s social development,decided to conduct an assessment in 2012 aimedat identifying the gaps between its main practicesand policies, and the Convention on the Rights ofPersons with Disabilities.The gap analysis focused on four keyissues: accessibility, labor inclusion, healthrehabilitation and education. Each issue hadthe points of the Convention that appliedto them as reference, and were comparedwith the information obtained about whatis currently happening in Ecopetrol. Thisinformation was collected via interviews,document analysis, and observations infacilities.As a result of this study, Ecopetrol hasa diagnostic and a proposal for theimplementation of initiatives aimed at closingthe gaps identified. During the first quarterof 2013 there will be a workshop for thedissemination of results among the differentareas involved in the study, and an action planis expected to be defined.Expoartesanías Fair2012, Bogotá, ProjectOrígenes.

292Promotion of the rights ofchildren and adolescentsIn accordance with the provisions of the TacticalPlan on Human Rights, Ecopetrol is committed torespecting the rights of children and adolescents,focusing on the following aspects:• Prevention and eradication of child laboramong contractors. Ecopetrol requiresits employees and contractors to make acommitment to human rights, no to childexploitation, the rejection of forced laborand no to discrimination in employment,through various means. In the first instancethrough the Code of Ethics, which isa formal and institutional standard ofpersonal and professional conduct.All Ecopetrol contractors must declaretheir adherence to the company’s Codeof Ethics. This declaration has significanteffects on the contracts, because theapplication of the Code is classified asa contractual obligation, whose breachgenerates the implementation of theagreed sanction instruments (penaltyclause for enforcement, early termination).Similarly, workers, contractors and third partiesinvolved in the company’s operations mustknow and accept the guidelines on corporatesocial responsibility (CSR) and the HumanRights Guide, which establish the company’srejection towards the issues of child labor, andforced, compulsory or non-consented labor.Additionally, within the registration form ofEcopetrol’s Supplier Rating System, thereis a section that relates to corporate socialresponsibility, in which the supplier respondswhether or not they adhere to each of the tenprinciples of the United Nations Global Compact.All these aspects mentioned are known to thecontractors and are reaffirmed in every newcontract and within performance evaluations,where issues such as CSR (Corporate SocialResponsibility) and HSE (health, occupational

Social dimension293Prevention anderadicationof childlabor amongcontractorsImproving thequality of lifeof children andadolescentssafety and environmental care) are always part ofthe criteria to be evaluated.In order to implement assurance actions on thisissue, in 2012 creation began of a risks map onhuman rights for Ecopetrol, which will have aspecial chapter analyzing vulnerability in relationto the risks of child labor and forced labor, withinthe following areas of contracting:• Regional/local contracting lines: 39 localcontracting lines.• Strategic sectors: Operational maintenance,administrative services (administrativemaintenance), transport (river and land), andcivil works.• Improving the quality of life of childrenand adolescents: throughout 2012 sixcourses were run on Dependent Care for thecaregivers of workers’ children, in which 179people participated.Additionally, monitoring was carried out onthe use of and satisfaction with the extendedpostnatal maternity and paternity leave inEcopetrol, which was used by 100% of employeesto whom it applied (78 mothers and 156 fathers).With respect to activities undertakenwith children and adolescents within thecommunities in which Ecopetrol has operations,in 2012 work was done on the promotion of theright to universal and quality education throughinteragency partnerships with the Ministry ofNational Education , Batuta, Colombianitos,Maloka, the Organization of Ibero-AmericanStates (OEI), Fundesmag, the Salvi Foundation,the Teje – Teje Foundation, the CRIC (RegionalIndigenous Council of Cauca), the VenturesCorporation, Colfuturo, Fulbright, the CarolinaFoundation and members of the NationalMuseums Network.

294Efforts were joined for symphonic and culturalmusic education at the Batuta orchestralcenters as well as in symphony orchestrasfrom certain areas of the country, benefiting5,200 children and adolescents. Additionally,educational and cultural activities weresupported in the National Museums ofColombia, in La Guajira (Corporation forthe Interactive Museum Center of Culture,Science, Technology and Innovation of LaGuajira) and the Colsubsidio Children’sMuseum, in Bogotá, as well as differentmultisports centers in the country.In line with the strategy of improving thequality of education, support was given tothe development of the National LiteracyPlan for preschool, primary and secondaryeducation, and the training of 300 teachersfrom child development centers and thePAIPI (Comprehensive Early Childhood CareProgram ) in psychoactive development inearly childhood. Finally, seeking to reduce thetechnological gap and improve the quality ofeducation, various educational institutionswere provided with teaching materials andcomputers with access to satellite internet andalternative energy.Freedom of association and theright to collective bargainingEcopetrol recognizes the freedom of associationthat all employees have, ensuring their rightto form trade unions or workers’ associationsand to freely decide whether they wish to jointhem, as well as to participate in the collectivebargaining process.Also, the company promotes respect forworkers belonging to unions and their leaders,it provides guarantees for their freedom ofaction and prevents situations of harassmentor discrimination. Ecopetrol’s work to ensurerespect for the freedom of association and theright to collective bargaining of its workers, isdetailed in the Labor Practices section of thisreport (page 263).Human rights in the CollectiveBargaining AgreementEcopetrol acts together with the differentcoexisting unions within the company in thedefense of human rights and peace, recognizingwithin the Human Rights Chapter of theCollective Bargaining Agreement (Chapter XVII),issues related to the management of workersthat may be in situations that jeopardize orviolate their human rights, and establishesprotective measures such as paid leave,recognition of economic aid and workplacetransfer, among others, under principles of:

Protected by theCommittee on HumanRights and Peace34union workersClimate of respectand defense of theright to life andhuman rightsPeacefulcoexistencePeaceful resolution ofconflicts and peacewithin the companyand in its areas ofinfluence in generalPromotion ofInternationalHumanitarian Law inthe common areas ofinfluence of Ecopetroland the Workers’Trade Union (USO)The contents of the Human Rights Chapter of theCollective Bargaining Agreement are managed andensured through the National Committee on HumanRights and Peace, which operates in Bogota, andregional subcommittees located in Magdalena Medio,Cartagena, Huila, Apiay and Orito. In Bogota there aretwo subcommittees: one in Ecopetrol Corporate andone in the Vice Presidency of Transport and Logistics.For each of the subcommittees there arerepresentatives from Ecopetrol and the Union. Interms of the formation and operation of the NationalCommittee, the company has two representatives andthe Workers’ Trade Union has four. Both the NationalCommittee and the Subcommittees meet once a monthduring the year, in the country’s different regions.Further, in 2012 two biannual meetings were heldinvolving all regional human rights subcommittees.The first meeting was held in Cali and the second inCartagena, where there was a presentation of themanagement reports and verification visits conductedjointly, by company and union, to the workplacesidentified as a priority for the verification of workingconditions. The humanitarian support recognizedthrough these committees consists of financialhelp through paid leave for the affected worker;aid equivalent to 50% of the collective bargainingagreement’s expense allowance, which is grantedwhile the employee is not working; transport forthe family group, for as long as the displacementsituation for security reasons endures, and inthe event that the employee does not move theirfamily, they shall be entitled to tickets so thatthe duly registered family group can visit themonce a month. Psychological support for workersand their families who find themselves in thesecircumstances is also offered.Currently, 34 union workers are under theprotection of the Committee on Human Rights,who are receiving the support and aid set out in theHuman Rights Chapter of the Collective BargainingAgreement.

296Training and disseminationon human rightsIn order to raise awareness among the Employeeand Contractor stakeholders, a communicationsplan was implemented in 2012 that, throughcompany’s various internal channels, aimed to:inform regarding the concept of Human Rightsand Company, as well as Ecopetrol’s commitmenttowards the issue; commemorate important datesrelated to human rights; disclose the availablechannels for the filing of petitions, complaintsand claims, and disseminate the efforts made byEcopetrol on the issue.In addition, 10 workshops were held in Bogota withthe participation of 147 employees from variousDepartments of the Exploration & Productionbusiness, which incorporated the concepts ofcorporate social responsibility and human rightsas essential tools to obtain results aligned toEcopetrol’s sustainability strategy.Similarly, there were three workshops on the laborstandards of the International Labour Organization(ILO) within the framework of the Global Compactprinciples. These involved 24 direct Ecopetrolemployees from departments such as the LaborRelations Unit, the Citizen Participation Office,the Physical Security Department, the CorporateCommunications Unit, the Ethics and ComplianceUnit, and the Corporate Social Responsibility Unit.In the same vein, a talk was held in Bogota calledApproach to the Global Compact principles, whoseaim was to present the importance of respectinghuman rights in the national and internationalcontext, and its relationship with business. Thistalk was attended by 29 Ecopetrol contractorexecutives in Bogota.Moreover, throughout 2012 the USO’s NationalCommissioners on Human Rights and Peacepromoted academic actions through workshops,discussions and meetings across the country,involving workers and community members,reaching 656 people. Additionally, in 2012 theseventh edition of the Diploma in Human Rightswas carried out with Universidad Nacional deColombia, through which 36 workers from differentregions of the country were trained.Finally, to ensure the skills of Ecopetrol employees,in 2012 a human rights module was designed withthe Corporate University, which will be availableas part of formal training on Corporate SocialResponsibility in 2013.Training activities with the ArmyIn 2012, through an agreement signed with theMinistry of Defense, Ecopetrol, in accordance withthe guidelines established in the Mining and EnergyCommittee (CME for its acronym in Spanish)regarding support for the Comprehensive Policyon Human Rights and International HumanitarianLaw (IHL) from Ministry of Defense, supportedtraining activities for members of the Armed Forcesassigned to the company’s area of influence, onissues related to the respect and protection ofhuman rights and compliance with IHL.Given that on this issue the aim is to createinstalled capability for the Ministry to develop theirown training activities in line with their policy’sapproach, together with the Army’s Human RightsLeadership, an agreement was made to supporta pilot plan for training in IHL for members of theArmed Forces, by providing resources for thecreation and reproduction of the material requiredfor this purpose.

Social dimension297Delivery was made ​of 28 simulationscenarios on International HumanitarianLaw to support training activities formembers of the Armed ForcesIn this way, delivery was made of 28simulation scenarios on InternationalHumanitarian Law, 550 command books,3,000 packs with informative content onhuman rights and 3,000 packs with contenton International Humanitarian Law. Allmaterial was designed and developed underthe coordination of the Army’s Human RightsLeadership.Moreover, in developing the pilot planit was also suggested that the Army’sHuman Rights School conduct training incertain Instruction, Training and RetrainingBattalions (BITER for its acronym inSpanish). Thus, during the second halfof 2012, three trainings were carried out:BITER 30 (Norte de Santander - Salazar delas Palmas); BITER 18 (Saravena - Arauca)and BITER 16 (Aguazul - Casanare), in whichEcopetrol had the opportunity to disseminateits Comprehensive Policy, Human RightsGuide and the company’s commitment to theimplementation of recommendations issuedby the international initiative for VoluntaryPrinciples on Security and Human Rights.During scheduled training the RecognizeProgram (Reconocer in Spanish) was alsoundertaken, with which Ecopetrol seeksto acknowledge the work of members ofthe Armed Forces and encourage them toconduct their activities under a frameworkof respect for human rights and compliancewith IHL.Training activities with the PoliceFor 2012, support for the following trainingactivities was agreed with the GeneralInspectorate of the National Police:• International symposium on human rights,with emphasis on the use of force and thevulnerable population. The event took placein Bogota on September 10, 11 and 12, andfeatured nationally and internationallyrecognized panelists. 210 people attended,including members of Ameripol, internationalorganizations, embassies, members of theMinistry of Defense, the Army, the Police,NGOs and universities.• Masters-level training in human rights forsix members from the Human Rights area ofthe General Inspectorate.• Diploma in Contextualization of the victimslaw from the standpoint of the universaland Inter-American system of humanrights and the use of force and firearms byofficers responsible for enforcing the law.This diploma was delivered by the NationalSchools Department and National PoliceSchool, with support from the Inter-AmericanInstitute of Human Rights. It was directedat 40 members of the Police with directjurisdiction in the topics covered during thetraining.In addition, under the agreement signedbetween the Ministry of Defense and Ecopetrol,during the second half of 2012 transmission ofthe Ecopetrol Online Program began, throughthe Army’s stations found in some of the areaswhere Ecopetrol operates, and that due to theircriticality from the point of view of securityand human rights, require extra effort in termsof communication to the community andmembers of the Armed Forces.This enabled Ecopetrol to use these spacesfor the production and broadcast of messages

298In total, over the three years ofimplementation, the Program for thePromotion of Human Rights in La Cirahas reached 6,358 people.related to the promotion of attitudes ofcare and cooperation in safeguarding thetransportation infrastructure, and thepromotion of actions under a frameworkof protection, respect and promotionof human rights, with the creation ofan attitude of care in the event of anemergency due to leaks or breakages inpipes transporting oil, while also reportingabout social investment projects.1Introductorymodule on humanrightsPromotion and disseminationprogram in La Cira InfantasSince 2009 the Human RightsDissemination and Promotion programhas been carried in the La Cira Infantasproject, in partnership with Occidental deColombia. In 2012, the program reached900 contractors, 300 members of theArmed Forces (Army and Police) and privatesecurity guards, and 300 school children(primary grades 3 through 5) from thedistrict of El Centro.2Human rightsreferenceframeworkThe training includes three thematicmodules:Program for the Promotionof Human Rights in La Cira3VoluntaryPrinciples onSecurity andHuman Rights

Social dimension299National Human RightsDay celebrated withstudents from YopalAs part of the celebration of the National HumanRights Day in 2012, Ecopetrol’s Superintendenceof Northeastern Operations supported themeeting of students from different schools whogathered to discuss the issue.The event was organized by the VictimsTransitional Justice Committee for Casanare,composed of the Departmental GovernmentSecretary, the Police, the Army, INCODER andthe Ombudsman.“Various State agencies have come together,with the support of Ecopetrol, to conduct atraining session with students from schools inYopal, in order to make them aware of wherethese rights arise and how they can help theirenvironments and communities to strengthenthe respect and fulfillment of Human Rights,“said Barba Parra Perilla, psychologist of theOmbudsman in Casanare.Martha Luz Medina, an official in charge of Victims issues in theDepartmental Government Secretary, said that the meeting alsoaimed to raise awareness among adolescents and young peopleon respect for human dignity, which encompasses respectingdifferences of thought, personality or ways of life that wehumans have.The celebration concluded with an interagency session withrecreational activities and a musical presentation, wherestudents actively participated and were seen to be receptiveto these initiatives that promote the defense of life and otherfundamental rights.Voluntary initiatives in human rightsIn addition to its own procedures andstandards, Ecopetrol adheres and activelyparticipates in three voluntary initiatives onhuman rights: United Nations Global Compact,Guías Colombia and a platform for analysis andreflection called CME- Security and HumanRights.Global CompactActivities for the dissemination and promotionof Global Compact principles were takenforward through workshops on labor standardsof the International Labour Organization (ILO)aimed at the company’s contractors andemployees, in addition to various businessstrengthening projects carried out during theyear in different company operating regions,in which 122 companies were trained in humanrights and the Global Compact.In 2012, Ecopetrol supported the Global CompactLocal Network in Colombia through associationwith this corporation within the contributingmember category. Additionally, the companyactively participated during the year in threethematic roundtables that were carried out:Roundtable on Principles 1 and 2, Roundtableon Child Labour (Principle 5) and Roundtable onPrinciple 10 (Anticorruption).Additionally, in 2012 Ecopetrol was elected to theSteering Committee of the Global Compact Networkin Colombia and helped organize the SecondCongress on the Global Compact, a platform inwhich it shared its Anticorruption Strategy.In April 2012, Ecopetrol sent its thirdCommunication on Progress to the UnitedNations, corresponding to the work done by thecompany in 2011.

300Encourage thedevelopmentand diffusion ofenvironmentally friendlytechnologies.Work against corruptionin all its forms, includingextortion and bribery.10Support and respect theprotection of internationallyproclaimed human rights,within its sphere of influence.19 2Make sure that they are notcomplicit in human rightsabuses.Undertake initiativesto promote greaterenvironmentalresponsibility.Principles of theUnited NationsGlobal Compact8 3Uphold the freedomof association and theeffective recognition ofthe right to collectivebargaining.Support a precautionaryapproach to environmentalchallenges.7Uphold the eliminationof discrimination inrespect of employment6and occupation.5Uphold theeffectiveabolition of childlabour.4Uphold the eliminationof all forms of forcedand compulsory labour.

Social dimension301Under the CME, in 2012 three documents wereapproved with recommendations on security andhuman rights for companiesGuías ColombiaThis national initiative involving companies, civilsociety organizations and the Government, seeksto contribute to the respect and promotion ofhuman rights and international humanitarian lawin the context of business activity, through the jointconstruction of knowledge and the establishment ofbest practices.Ecopetrol, as a member of Guías Colombia,participated in 2012 in the development of thebaseline for mechanisms in complaints and claimsregarding security and human rights practices,and was part of the working teams engaged inthe creation of two new guides aimed at ensuringrespect for human rights in labor relations and landmanagement.Additionally, in 2012 Ecopetrol was elected to GuíasColombia’s Steering Committee.CME – Security and Human RightsCME – Security and Human Rights is a platformfor analysis, reflection and recommendation forimproving the performance of the sector andColombian state institutions in respect for humanrights within public and private security.In 2012 Ecopetrol participated in the CME’sSteering Committee and the Working Groups onCommunications, Companies and Armed Forces,and Extortion and Kidnapping Risk Management .As a result of the constant work of these groups,the following recommendations were developedand approved in the CME’s Plenary Session:• Recommendations to support the DefenseSector in the implementation of theComprehensive Policy on Human Rights andInternational Humanitarian Law from theMinistry of Defense.• Recommendations for the use of Red Crossemblems.• Recommendations for the management ofextortion and kidnapping risks.Launch of the document on recommendations for the prevention of extortion and kidnapping, of the CME. In the photo, from left to right: AlejandroMartínez, Juan Carlos Ucros, Clara Rojas, Jorge Enrique Bedoya, Francisco Lloreda, Ramiro Santa, Claudia Llano, José Rafael Unda.

302Society and communityAs part of its corporate responsibility model, Ecopetrolrecognizes society, community and the State as part of itsseven stakeholders. Table 72 shows the commitments andobjectives that the company has established with thesestakeholders, which form the basis of the materiality of theissues addressed by this sub-dimension.

Social dimension303Table 72Commitments and objectivesStakeholder Commitment ObjectivesSociety and CommunityStateParticipate in the sustainabledevelopment of the country,within a framework of sharedresponsibility and respect forHuman RightsHelp build a Social State basedon the rule of Law by fulfillingour obligations and supportinginstitutional strengtheningCarry out all activities with social andenvironmental responsibilityPromote collective processes of regionaldevelopmentStrengthen relationships of mutualresponsibility based on dialogue andparticipationAct within a framework of respect andpromotion of Human RightsEnsure and promote compliance with theobligations with State institutions.Support the strengthening of territorialentities in order for them to properlymanage their obligations by means of citizenparticipationMateriality ofSociety and CommunityTo achieve its corporate targets, including thedevelopment of the communities in which itoperates, but which also cover the countryas a whole, Ecopetrol annually reviews theissues of greatest interest to this group.Thus, in addition to the studies reported inother sub-dimensions, in this area specialattention is paid to the concerns raised inthe Public Audiences on Accountability,as well as those gathered by the CitizenParticipation Office.The major topics covered in this subdimensionthat seek to address society,community and the State, are:Social Management ModelSocial investmentNational projectsRegional projectsRegional vision agreementsSocial impact managementCitizenship and democracy

304Social management modelIn order to comply with its commitments,Ecopetrol has created a social managementmodel through which the company aims toinfluence the generation of favorable conditionsfor development in the territories where it ispresent, based on the effective management ofthe impacts caused by its activities and the socialrisks that may affect operations.Similarly, it has created an early interventionapproach, in order to provide early warning ofthe occurrence of social risks and facilitate themanagement of impacts.With this model the aim is to establishstrategic alignment between activitiesin projects and our operations, impactmanagement, risk treatment and participationin development, all within the framework ofrespect and promotion of Human Rights.This social management model isimplemented through the formalization ofspaces for interaction with communitiesand coordination with the authorities, otherbusinesses and social organizations, aroundshared visions of development at local andregional levels, as shown below:Social Management ModelSocial Management Operating ModelNational Development PlanNational Departmental PlansRegional VisionScenariosViabilityImpactsSustainabilityRisksDevelopmentEducation and CultureRegional CompetitivenessCitizenship and DemocracyTerritorialStrategicProjectsCreation andstrengthening ofnetworks and alliancesTerritorialStrategicProjectsCommunity-CompanyScenariosLocalvisionscenariosHuman RightsMunicipal Development Plan

Social dimension305In 2012, Ecopetrol signed social investmentagreements worth $304,489 million, 42.2%more than in 2011Direct social investmentIn 2012, Ecopetrol signed social investmentagreements worth $ 304,489 million, 42.2% morethan in 2011 (see Figure 53). This value includesthe social investment directly managed by thecompany in the regions where it undertakesprojects and operations.Social investment by lineIn 2012, social investment focused on the lines of educationand culture, regional competitiveness and citizenship anddemocracy, as described in Table 73.Table 73Social investment linesFigure 53.Direct social investment (Millions of pesos)304,489LinesScope• School access and retention• Educational infrastructure and suppliesprojects125,803135,638159,053214,123Educationand Culture• Eradicating Illiteracy• Digital literacy• Programs to improve the quality ofeducation• Promotion of arts and crafts• Rescue of cultural identity• Training of competent human talent instrategic activities for the local and regionaleconomy2008 2009 2010 2011 2012Source: Ecopetrol, Vice Presidency of HSE and Operational SustainabilityRegionalCompetitiveness• Strengthening of integrated production• Strengthening of micro, small and mediumenterprises• Maintenance, improvement andconstruction of road infrastructure• Provision of utilities, including water,sewerage, power and gasCitizenshipand Democracy• Strengthening of civil society organizations• Strengthening of governance in theterritories• Emergency prevention and response• Strengthening of relief agencies• Strengthening of the plans and life projectsof ethnic groups

306In 2012 Ecopetrol concentrated most of itsresources on the Regional Competitiveness line,with a contribution of $ 188,134 millionIn 2012 Ecopetrol concentrated most of itsresources on the Regional Competitiveness line,with a contribution of $ 188,134 million.The main agreements signed within this linecorrespond to road infrastructure and publicservices projects, with a value of $ 136,027 million,and production capability strengthening projects,with a value of $ 37,181 million (see Figure 54).Figure 54.Social investment by line(Millions of pesos)20112012188,134124,33454,42274,27035,36742,083Regional competitivenessEducation & cultureCitizenship and DemocracySource: Ecopetrol, Vice Presidency of HSE and Operational SustainabilitySocial investment by regionEcopetrol’s social investment impacts the followingregions: Orinoco, Magdalena Medio, Central-East,Caribbean, South and West, areas where the oilinfrastructure is present. In 2012, the regions thatthe experienced the highest growth compared to2011 were the West, with an increase of 141.7%, andCentral-East, with an increase of 114% (see Figure55). These percentages are the result, in the firstcase, of agreements signed with resources fromthe Crude Transport Project and the IntegrityProgram (PDI for its acronym in Spanish), andin the second case, the signing of an agreementfor the maintenance of road infrastructure in theareas of influence of the Caño Limón Coveñaspipeline, in partnership with the Governmentof Norte de Santander, the municipalities ofToledo, El Carmen, Convención, Teorama, ElTarra and the Ecopetrol Foundation for theDevelopment of Catatumbo.

Social dimension307Figure 55.Social investment of region (millions of pesos)2011201270,25266,89767,66666,71351,29631,16938,07029,53617,61024,49718,832 18,4599,978 7,637OrinocoMagdalena MedioCentral - eastNational ProgramsCaribbeanSouthWestSource: Ecopetrol, Vice Presidency of HSE and Operational SustainabilityLeveraging of resourcesIn 2012 Ecopetrol managed resources with otherentities reaching a ratio of 7.1, i.e., for every pesoinvested by Ecopetrol in territorial developmentprojects and projects for risk and impactmanagement, other entities contributed $ 7.1.This ratio has shown annual growth, as can beseen in Figure 56.Figure 56.Leverage ratio for social investment resources86421.054.36.147.102009201020112012Source: Ecopetrol, Vice Presidency of HSE and Operational Sustainability

308Social investment inpartnership contractsUnder the partnership contracts in whichEcopetrol participates without being the operator,the company made ​contributions in 2012 of$25,877 million for social investment projects,which were executed by its partner companies.Overall, taking into account the contribution byEcopetrol, partner companies and others, in 2012a social investment of $49,044 million was made.Figure 57 shows the contribution of Ecopetrol andtotal investment by investment line.Figure 57.Social investment in partnership contracts by line,in millions of pesosTotalEcopetrol Contribution10,93311,6428,9225,4976,6694,7456,6833,6354,5792,3992,2201,1833,9131,901InfrastructureEducation, art,sports and cultureProduction projectsInstitutionalstrengtheningCommunitystrengtheningHealthEnvironmentalmanagementSource: Ecopetrol, Vice Presidency of HSE and Operational SustainabilityNational projectsThe main national social investment projects in2012 were:Education and cultureImplementation of ICT (Information andcommunications technology)Since 2005, Ecopetrol has supported the provisionof ICT to improve the quality of educationalinstitutions. This process has been supported bythe Ministry of National Education (MEN for itsacronym in Spanish) to ensure that the equipmentdelivered by Ecopetrol is accompanied by thetraining of principals and teachers in the usethereof, internet access and educational software.Additionally, through international aid, it hasbeen possible to have access to solar panels andsatellite internet, which has enabled the project toreach any educational institution in the country, inan innovative and sustainable manner.Between 2011 and 2012 it was possible to equip30 institutions in the departments of Valle delCauca, Antioquia and Córdoba.Implementation of theNational Literacy PlanIn 2012 Ecopetrol became a partner of theNational Literacy Plan, an initiative from theMinistries of National Education and Culture,which aims to improve reading skills in the

Social dimension309Cira Infantas4,414 m2012Total EcopetrolInvestment330,735 m2012Social investment in La Cira InfantasAs part of the La Cira Infantas PartnershipContract, operated by Ecopetrol, social investmentagreements were signed in 2012 for $4,414 million,of which $3,424 was contributed with the partners’shared resources for the partnership contract,and $989 million was contributed by Ecopetrol.Of Ecopetrol’s contribution, $620 million wastaken from the social investment budget for theMagdalena Medio region and $369 million wascontributed directly to the partnership contract.Ecopetrol total social investment 2012In total, during 2012 Ecopetrol contributed$330,735 million in social investment. Table74 details the total investment executed by thecompany.Table 74Ecopetrol total social investmentOperation typeManager ofsocial investmentagreementsEcopetrolContribution 2012(Millions of pesos)Direct Ecopetrol 304,489Partnership(La Cira Infantas)Ecopetrol 369Partnership Partner companies 25,877Total $330,735Source: Ecopetrol, Vice Presidency of HSE and Operational Sustainabilitycountry through the provision of libraries toeducational institutions.During 2012, the Ministry of National Educationfocused on teacher training, while the Ministry ofCulture bolstered local libraries, so that the bookscould be used by students, by their families andthe community.In addition to the 256 initial titles, libraries willhave textbooks for Afro-descendant communities,for Indigenous communities, and for Romanipopulations. In 2013, the collections will bedelivered to 528 educational institutions.From Zero to AlwaysTo expand educational coverage in the country, Ecopetroljoined this initiative from the National Governmentthrough the promotion of the “Pisotón” methodologythat seeks that children between 0 and 5 years notonly have access to the school system, but also thattheir caregivers be properly educated. During 2012 thepartnership was signed, the regions to be worked onwere defined, and the preparation of the material wascarried out. Teacher training will begin in 2013 with thebeginning of the school year.Sports SchoolsIn partnership with the Colombianitos Foundation,3,000 children have benefitted and it was ensured thatat least 95% of them were kept in the school system.

310Group from the ZeroIlliteracy Program inMaicao, GuajiraThis project promotes democratic values ​and the teaching of an alternative model,based on sport, for the peaceful resolution ofconflicts.Bachilleres por ColombiaTo promote higher education in Colombia,Ecopetrol carries out the Bachilleres porColombia (High School graduates for Colombia)program that benefits the best high schoolstudents in the country.In 2012, university scholarships were awardedto the best 70 graduates in the country. Duringits 26 year history, the Bachilleres por ColombiaMario Galán Gómez program has benefited 840students throughout the country.Fulbright, Colfuturoand Carolina Foundation ScholarshipsIn 2012, the partnership with Fulbright and Colfuturocontinued, in order to support the training of graduatestudents from the oil regions to enable them to accessthe best universities abroad.During the year, 46 scholarships were awardednationwide. Also, a new partnership was startedwith the Carolina Foundation, aimed at funding newscholarships for students who want to further theirstudies in Spain.Zero Illiteracy ProgramIn partnership with the Ministry of Education and theOrganization of Ibero-American States, Ecopetroljoined the initiative to reduce illiteracy in Colombia.Ecopetrol has invested $40,500 million in thisprogram, which currently benefits 53,000 people. Thetarget is to reach 60,000 beneficiaries by 2014.MuseumsIn order to promote and celebrate the expressions,beliefs and values ​that characterize regionalidentities, Ecopetrol has supported the carryingout of periodic and temporary exhibitions, mainlyin the Museum of Antioquia, National Museum,Museum of Modern Art of Medellin and Museum ofLa Guajira. In 2012, more than 60,000 attendeesvisited these exhibitions.

Social dimension311GeneralServiceTraining, inPutumayoRegional competitivenessTraining for the FutureThis program seeks to build and establishcapabilities in local and regional human talentin activities for the oil industry’s value chainand other strategic activities for the localand regional economy, through training andeducation processes. Primarily in partnershipwith the SENA, programs are offered in job skillstraining and certification to those municipalitieswhere that institution has no presence.In 2012, 6,156 job skills certification processeswere conducted, 4,095 people benefited fromadditional training programs, technical training,auxiliary training and technical specializations,and another 3,000 people were in the processof completing their training in 2013. Additionally,4,911 people were trained in safe work atheights and 5,854 took the course For a Safeand Responsible Life, which aims to raiseawareness on care for life and the environment.Production capabilitiesIn order to strengthen production capabilitiesto generate alternative sources of incomeand improve quality of life based on territorialpotential, Ecopetrol carries out projectsin integrated production and businessstrengthening, mainly in areas where oilinfrastructure is present. The following are2012’s main projects:• Integrated productionIn 2012, 2,950 people were trained inproduction capabilities, 1,300 productionunits were strengthened and 86 companieswere consolidated. For the execution of theprojects, there was support from partnerssuch as the Corporation for the Participatoryand Sustainable Development of SmallFarmers (PBA Corporation), the NationalNetwork of Local Development Agencies(ADELCO Network), oil foundations,among others.The main standout projects for eachregion are shown in Table 75.Welding Training

Table 75Main production integration by regionRegionCaribbeanProjects• Consolidation of conditions conducive to productivity, competitiveness and partnershipin communities of small rural producers for their integration and sustainability insix production chains: plantain, cassava, yam, cocoa, sesame and avocado in thedepartments of Bolívar, Córdoba, Sucre, Atlántico, La Guajira, Magdalena and Cesar.• Improving food security conditions for 70 households through the implementation ofproductive yards and four school gardens in the municipalities of Zona Bananera andCiénaga, department of Magdalena.Magdalena Medio• Strengthening the production of oil palm with smallholders through the modernizationof plantation management and restoration of plant material in the departments ofSantander, Bolívar and Cesar.• Strengthening rural producers through the improvement and modernization of theproduction of cocoa in the departments of Santander and Cesar.• Strengthening the production of flowers and foliage, as well as food security throughhome growing, for small rural producers in Valle del Cauca.West• Regional production alliance for integrated and agribusiness development in the ruralareas of eight municipalities in Valle del Cauca, starting with support for pilot projectsin income generation for small farmers from the municipalities of Dagua, Yumbo and LaCumbre.Central-East• Improving the profitability, marketing and sustainability of dual-purpose farms undera silvopastoral system for displaced persons and small livestock farmers in themunicipality of Tibú.• Strengthening the production and marketing of cocoa to benefit small producers in theareas of Tibú and Sardinata.• Increased production of red tilapia in Saravena.• Business strengtheningIn 2012 Ecopetrol joined forces with national andregional bodies, in order to work towards businesspromotion and strengthening in the areas wherethe company operates. To this end, it developed aprogram to strengthen micro, small and mediumenterprises (MSMEs) aimed at boosting regionaleconomic activity.Through strategic alliances and with an investmentof $6,800 million, in 2012 322 processes werecompleted in issues of: operations and logisticscosts, OHSAS 18001 and RUC managementsystems, corporate social responsibility practicesand project management.Additionally, a pilot program was carried out tostrengthen 24 large contractor companies in theregions of Magdalena Medio and the Orinoco.Moreover, Ecopetrol along with Confecámaras,Universidad Jorge Tadeo Lozano, Corporación Calidad,Bancoldex, the Association of Petroleum Foundations,and 14 chambers of commerce from around thecountry (Arauca, Barrancabermeja, Buenaventura,Cali, Cartagena, Casanare, Cúcuta, Dosquebradas,Neiva, Piedemonte Araucano, Putumayo, Sincelejo,Tumaco and Villavicencio) came together to stimulateeconomic activity, the business fabric and the use ofMSMEs in various areas of the country. The projectestablishes initial investments of $ 5,500 millionand considers working with partner organizations

Social dimension313and public and private entities in the areasidentified, making use of the sum of experiencesto strengthen business and knowledge in theterritories. The municipalities initially coveredby the project are: Cartagena, Sincelejo, Cúcuta,Tibú, Barrancabermeja, Arauca, Saravena,Yopal, Villavicencio, Neiva, Orito, Tumaco,Dosquebradas, Yumbo and Buenaventura.• Road InfrastructureDuring 2012 work was done on 300 km ofroads through agreements between Ecopetroland its partners. The main projects aredescribed in Table 76.Representatives of the institutions that support the Partnership to Strengthen the Business FabricTable 76Main road infrastructure projectsRegionProjects• Redevelopment, paving and maintenance of 11.1 km of the road network inBarrancabermeja (Santander), in partnership with the municipality.Magdalena Medio• Support for the construction of embankments for access to the bridge over CañoAngustias, in Puerto Wilches. The 31,500 inhabitants of the municipality will benefit,in addition to improving the company’s mobility conditions. In partnership with theDepartment of Santander.Central-East• Maintenance of 3.5 km of road in village kilometer 88, rural district of Campo DosReyes, municipality of Tibú (Norte de Santander). In partnership with the municipalityof Tibú, the community and Asogpados.• First phase of the redevelopment of Cúcuta’s road network, Avenue 21 between streets5N and 3N of Barrio Juan Atalaya. Natilan Sector, municipality of San José de Cúcuta.Orinoco• Construction of the access bridge for the VillaManuela social housing program, in themunicipality of Acacías - Meta. In partnership with the Meta Development Institute.• Construction of works of art on the access roads to the rural districts of Araguaney,Primero de Mayo, Punto Nuevo and Barbascos in the municipality of Yopal (Casanare).In partnership with the municipality of Yopal..South• Creation of 9.8 km of rural roads with the supply of road surfacing material phase II,municipality of Orito (Putumayo).

314Utilities InfrastructureIn 2012, utilities projects were implementedbenefiting 22,100 families. Table 77 presents themain projects by region.Table 77Main public utilities projectsRegionMagdalena MedioProjects• Support for the construction of the El Ferrocarril manifold in order to collect and carrywastewater from communes 2, 3, 6 and 7 of the municipality of Barrancabermeja,which are discharged into the municipality’s water bodies such as the MiramarWetland and Magdalena River, in partnership with the municipality of Barrancabermejaand Aguas de Barrancabermeja.Central- East• Improvement of basic sanitation conditions with an emphasis on health services for thepopulation of the village of Miraflores, rural district of San Martin de Loba, municipalityof Sardinata, which benefited 30 rural families in socioeconomic band 1. Thisagreement was signed in partnership with the Community Action Board, MirafloresVillage, and the municipality of Sardinata.• Construction of the El Progreso aqueduct for the villages of Arrayán, Canales andLlanitos in the municipality of Sáchica (Boyacá), in partnership with the municipality ofSáchica.• Construction of the Sewerage Master Plan, rainwater, Villeta sector (Cundinamarca).Orinoco• Improvement of sewerage in the district of Santa Rosa de Rionegro and the villageof Rincón de Pompeya, municipality of Villavicencio (Meta), with support from theDepartment of Meta and EDESA E.S.P.• Design of the Unión las Camelias aqueduct for the villages of Santa Rosa, El Triunfo andLa Primavera, in the municipality of Acacías (Meta), in partnership with the municipalityof Acacías and ESPA E.S.P.South• Construction of two tanks for gravity flow water supply to supplement the aqueductsystem in the village of Achiote, municipality of Orito (Putumayo), with the support ofthe Alto Magdalena Foundation.800 families benefited from the project forthe Implementation and Strengthening ofProduction Projects in Magdalena Medio.

Social dimension315Regional projectsDuring 2012, in each of the regions (Caribbean,West, South, Central-East, Magdalena Medio andOrinoco) projects were implemented with socialinvestment resources in different strategic lines.Table 78 lists the main projects per region.Table 78Regional projectsRegionProjects• Implementation and strengthening of production projects. Achievements: foodproduction for the basic family food basket in the municipalities of Betulia andCimitarra; production improvement and production strengthening for cocoa in PuertoParra, San Alberto and Aguachica; modernization of plantain and papaya cultivation inthe municipality of Betulia, and strengthening of the oil palm chain in Magdalena Medio.Beneficiaries: 800 families. Partners: Fundesmag.Magdalena Medio• Promotion of projects identified as drivers of regional development, framed withinregion-vision processes, under two major initiatives: i) Roads for development, whosemain component is the construction of the Yuma road, which links the Ruta del Sol(Route 45 on the national roads network) with the Guillermo Gaviria Bridge, benefitingBarrancabermeja and the surrounding municipalities. ii) Business force, whichundertakes activities for the strengthening of local business and the diversification ofthe regional economy, such as the construction of the convention center, events andtrade promotion activities for Barrancabermeja.Orinoco• Improving quality of life in the village of Apiay, municipality of Villavicencio, throughthe construction of an aqueduct system, comprised of the deep well, drinking watertreatment plant, elevated storage tank and distribution networks. Beneficiaries: 3,000inhabitants in the village of Apiay. Partner: EDESA.• Paving of 1.1 km of urban roads and renovation of parks in Centro and Villa Carola,continuing the strategy Monterrey 2015 “Monterrey - Tourism municipality ofCasanare”. Beneficiaries: 10,000 inhabitants.Central - East• Construction of 26 sanitary units in the villages of Campo Tres, Campo Giles, Río Nuevoand the San Eduardo neighborhood, in the district of Campo Dos, municipality of Tibú.Beneficiaries: 130 people.• Strengthening of the Water Advocate Children Program, in the department ofCundinamarca. The campaign reached 6,600 households. Partners: AutonomousCorporation of Cundinamarca.

316Caribbean• Support for the integrated planning and management of the coastal area of PozosColorados and repopulation of spiny lobster, based on the establishment of artificialreefs for technical-organizational strengthening of the fishing community of La Pazand Pozos Colorados, in Santa Marta. Beneficiaries: 60 fishermen in the Bay of PozosColorados, belonging to the Asopescoltur and Copepazbe associations.• Strengthening of the “kaññas” traditional production systems, in subsistencefood production and income generation for the Ette Ennaka people, through theimplementation of forest crops and arrangements for 40 families in Issa Oristuna andEtte Butteriya. Cultural reinforcement workshops were also offered on fabrics, crafts,music, dance, ethno-medicine and self-government.West• Promotion of ecological thinking in rural schools of Antioquia, based on the respectfor differences and the appreciation of diversity, understood from the biological,human and cultural perspective ( Maleta Viajera (Traveling Suitcase) project). Throughcomponents including story, artists’ works, travel logs and teaching material, 18institutions, 1,374 students and 84 teachers benefited. This project was conducted inpartnership with the Museum of Modern Art.South• Partnership with the “Invest in Huila” Center for Competitiveness and InvestmentAttraction Agency, for the formulation and presentation of regional developmentprojects in the areas of fish, cocoa and tourism, raising national and internationalresources, and with an impact in the department of Huila.• Promoting social inclusion for the vulnerable population of the municipality of Neiva,based on technical and business training to 2,000 female heads of household, creating20 production units. This project is carried out in partnership with the SENA, theMunicipality of Neiva and the Alto Magdalena Foundation.

Social dimension317Regional vision agreementsTo promote the construction of a regional visionfor development, Ecopetrol participates in spacesfor the coming together of relevant stakeholdersin the region, through social and institutionalagreements that take shape in strategic territorialprojects for the medium and long term.During 2012, progress was made in consolidatingthese regional agreements as follows:Participatory Construction of theSustainable Development Vision for theLlanos Orientales RegionIn 2012, the Framework Convention and the firstcooperation agreement was signed for $596million, with Universidad de los Llanos, an entityin charge of exercising the technical secretaryfunction of this process that initially links theGovernments of Meta, Casanare, Arauca andVichada and which will include the participation ofcommunity and environmental organizations, theproduction sectors and associations, academia,research organizations, the Church and industry.Through this initiative, 35 leaders from the regionwill coordinate the process for the participatorycreation of a sustainable development initiativethat is consultative, innovative, inclusive andcompetitive, leveraged by methodological andscientific tools, forums, debates and regionalworkshops, which will result in specific productsfor the region’s planning.Barrancabermeja Great Social AgreementThe Great Social Agreement of Barrancabermeja,signed in 2010 between Ecopetrol and seven otherentities from the region, has been consolidated asa platform for dialogue, a place where, basedon the culture of dialogue, it is sought toensure that the various regional stakeholders(institutional, social, civic, business andcommunity) think of the territory as a socioculturalconstruct and as a living space.In 2012, this great platform for the generationof Regional-Vision processes, had thefollowing among its major achievements:• The essential elements of the GreatSocial Agreement were validated with thecommunities of Barrancabermeja. Duringthis exchange, new pillars were identifiedto be taken into account in the agreementsuch as the issue of human rights andgender, which will be generated during2013.• Projects considered key drivers for thedevelopment of Barrancabermeja and theregion in general were structured, suchas the Maternity and Child Center, theInteractive Park, the Yuma Main Road,and the Barrancabermeja EducationalComplex, among others.• Business strength was consolidated andeconomic diversification was supportedthrough competitive strategies such asthe Multimodal Logistics Platform projectand business fairs.• Diagnostics were prepared for the familypillar of Great Social Agreement, whichwill serve as input for the projects to beimplemented in 2013.

318ALL FORBARRANCABERMEJATwo years after having been set up, the GreatSocial Agreement, Barrancabermeja City-Region:100 years (GASB for its acronym in Spanish) hasestablished itself as the largest regional integrationinitiative promoted by Ecopetrol, for the creation of aparticipatory management model.Since the early twentieth century, when explorersdiscovered oil in natural springs and the pathwayopened to the first stills to process the crude, theMagdalena Medio region has been the heart ofColombia’s oil industry.Thus, 90 years ago Barrancabermeja was founded,a city in which many of its social stakeholders andregional leaders have their sights set on its 100thanniversary, which will be reached in 2022.In November 2010, many of them, led byEcopetrol, began to plant the seed for thegreatest regional project the city has ever known:the “Great Social Agreement, BarrancabermejaCity-Region: 100 years.”In total, there are eight entities including thecommunity, institutions, employers, civil societyorganizations, the church and academia, whichmake up this project, which was convened andincludes the participation of the Diocese ofBarrancabermeja, the Development and PeaceProgram for Magdalena Medio, the Government ofSantander, the Mayor’s Office of Barrancabermeja,the Municipal Council, Ecopetrol, the Workers’ TradeUnion-USO and the Chamber of Commerce.The creation of the Great Social Agreementinvolves participatory work and definition with

Social dimension319Good practicethe communities in six thematic pillars: humantalent development, institutional strengthening,economic strengthening, infrastructure forsustainability, civic culture and families as thecentral themes of development.These six central themes are addressed in across cutting manner with a focus on HumanRights and Civic Duties, and the whole processis oriented towards the integration of the cityof Barrancabermeja under the City-Regionscheme, with the understanding that democraticconsensus building is based on the participationof all citizens.For the manager of the Barrancabermeja refinery,Orlando Díaz, the GASB arises from the interestof men and women who see within the exercise ofdemocracy and civic responsibility, coupled withpublic administration, a historic opportunity for thecomprehensive development of Magdalena Medio.The primary purpose of this initiative is focusedon ensuring that citizenship, together with publicinstitutions and the private sector, engage incommon organizational processes that enablethem to take part, with effective power, in thepublic affairs that directly affect them.Therefore, according to Julia Celina Angulo,Ecopetrol’s social management leader inMagdalena Medio, this strategy is based oncommitment, inclusiveness, transparency andaccountability, integrating all social, political andeconomic stakeholders, recognizing the territoryas a space for life and not simply a geographicspace that serves the country’s economy.projects since the end of 2011. For example, withinthe Human Resource pillar, whose aim to reducethe inequality gap in terms of opportunity andcompetitiveness, there have been four workshopswith the participation of 120 people, representing 29institutions, within which it was possible to define theconcept of employment and its strategic lines.Among the specific results that should be attainedby this pillar, is to ensure that at least 50% of thelocal workforce available, is trained in the specialtiesrequired by the development sectors (infrastructure,services, petrochemicals). Similarly, an increase willbe sought in the percentage of school graduatesentering higher education programs.For its part, within the Culture and Citizenshippillar, and after four workshops involving 60representatives from different institutions, it wasdecided that the emphasis will be on strengtheningand encouraging behaviors that create a sense ofbelonging, respect for rules and shared norms thatfacilitate tolerance, solidarity, the recognition ofrights and responsibility for civic duties.In this regard, Monsignor Camilo Castrellón, Bishopof Barrancabermeja, states that “we have learneda new way of relating, of seeking common pathsand solving complex situations. We have been ableto solve problems using the common good as apremise. “The Presidency of the Republic turned the GreatAgreement into a pilot for the new regionaldevelopment policy, so as to coincide with the newterritorial approach of the national development plan,which promotes regional consensus initiatives.It’s about, she says, fostering the conditionsnecessary to meet local needs in all areas,which should culminate in the formulation andimplementation of long-term public policies.This coming together of stakeholders hasenabled each of the defined pillars to have keyAs mentioned by Darío Echeverry, advisor of theChamber of Commerce of Barrancabermeja, “we’veall done our bit in this process, and if people see thatthere is an opportunity to grow and develop, andopportunities for employment, business and socialdevelopment, then Barrancabermeja’s people willmake this a success.”

320An update was performed on the impacts andmanagement measures of relevance in 62 environmentalstudies, corresponding to 29 projects in exploration,production and refiningConsolidation of the Pacific RegionIn partnership with the National ProductivityCenter, which leads the technical secretaryfunction of the Pacific Vision platform, theidentification and prioritization of strategicprojects has been supported for the fourdepartments that make up the region (Cauca,Nariño, Valle del Cauca and Chocó).Also, regional stakeholders have been trainedin structuring projects and the dynamics of thenew General Royalties System; the design of theVisión Pacífico (Pacific Vision) magazine wassupported, which is to be published in 2013 withthe distribution of 4,000 copies, and a platform fordialogue with the national government has beenconsolidated.Caribbean Regional VisionIn partnership with the Caribbean Observatory,the regional vision exercise has been undertaken,which has made it possible to prioritizedevelopment projects in three strategicareas: poverty alleviation, climate change andinfrastructure for competitiveness.In 2012, the design was taken forward of a baselinefor determining the strategic projects in each ofthese areas in the departments that comprisethe Caribbean region (Atlántico, Bolívar, Cesar,Córdoba, Guajira and Sucre).Huila-Tolima Regional VisionIn coordination with the “Invest in Huila”Investment Attraction Agency and the Chamberof Commerce of Neiva, progress was made inidentifying strategic lines and projects to bepresented within the General Royalties System.Two projects were approved for a value of$1,365 million in production issues related tospecialty coffee and health tourism.Management of social impactsAs part of the relations process with theCommunity, Society and State stakeholder,the company has articulated guidelines forcitizen participation in the identification andmanagement of impacts, through the collectivedevelopment of management measures.In this context and through a cooperativeprocess, the authorities and communities arecalled to participate in a workshop to identifythe socio-environmental, physical, biotic andabiotic impacts associated with the projects andtheir respective management measures.This work takes into account the socialand cultural environment of stakeholders,something that enables a detailed and cleardescription of the activities and stages ofprojects, in order to generate discussion andanalysis of the impacts and, in turn, proposemanagement measures consistent with these.Later, at the project implementation stage, it isnecessary to continuously update the impactsand establish relevant management measures.In 2012, the above process was applied in 62environmental studies, corresponding to 29projects in exploration, production and refining.Social impactsEcopetrol operates under the criteria ofprevention and responsible management of allsocial impacts generated.

Social dimension321Impact is understood as everything thatgenerates changes or impacts, caused directlyor indirectly by a project or business activity onthe environment, and on the social and economiccontext of a given territory.The main social impacts generated by the companyare those related to the oil industry in general, suchas: deterioration of road infrastructure; impacton and fragmentation of land; impacts on culturalidentities; increased cost of living locally; involuntarydisplacement of social units, their production vocationand impact on social infrastructure, among others.Information and communicationprogram: establishing andstrengthening channels of informationand participation between thecompany and communities impactedby business activities, ensuringtimeliness, clarity and response toconcerns associated with the projects.Additionally, the company has carried out analysisof the cumulative impacts, construed as impactsthat have been generated in the areas and that areheightened or increased with the arrival of newprojects or activities. An example for the case ofcumulative impacts, is the generation of particulatematter that is caused by an ongoing company activityand that is increased by the arrival of new activities toa specific area.Measures to managesocial impactsIn response to the social impacts generated bybusiness activities, mainly by projects, constantwork is carried out in the creation of managementmeasures that will effectively manage theimpact, with implementation that is efficient andmeasurable.The main management measures implementedin 2012 as part of the social component ofenvironmental management plans, according tothe characteristics of each project and of eachcommunity, are the following:Mobilization program: actions tominimize the impacts generated bythe mobilization of equipment andmachinery for the project. Seeks toinform the authorities and communitiesin a timely manner regarding theschedule for the mobilization ofequipment and its implications, as wellas the respective safety measures inorder to define actions that ensure thecommunities’ mobility on the roads.

322Definitive relocation program:actions to ensure that involuntarydisplacement becomes anopportunity to improve the livingconditions of residents, and tooffset and reduce the negativeimpact. It is designed according toeach specific case.Program for the hiring oflocal labor: recruitment of localpersonnel, primarily unskilled, forthe undertaking of project activities.This program, together with thetraining of personnel related to theproject, seeks to control the impactof changes in cultural practicesassociated with migration andchange in the social environment, bypreventing the mass influx of foreignpersonnel through giving priority tothe recruitment of personnel fromthe project’s area of influence.In the same vein, the CorporateSocial Responsibility (CSR)procedure was developed incontracting and subcontracting,which incorporated local andregional employment generationfor unskilled (100%) and skilled(30%) labor from the projectimplementation’s social area ofinfluence . This aspect is a tenderassessment factor in contractorselection processes handled byEcopetrol.Risk management programAware of the importance of ensuring that plansfor emergency preparedness and response arefully implemented and properly articulated withcommunities and regional authorities, in 2012Ecopetrol created the company’s ContingencyProgram. This program has a group ofprofessionals that provide cross cutting supportto each of the pillars that comprise the program:• Implementation of emergency plans andenvironmental management plans. In2012, the dissemination process was carriedout for emergency plans and disaster riskmanagement with communities and territorialcouncils (municipal and departmental) thatmake up Ecopetrol’s area of influence. Thesedisseminations are being conducted ​by thevarious branches of the Red Cross, throughcontracts signed with Ecopetrol, which willreach 1,349 communities from the area ofinfluence of the company’s operations.• Updating of environmental managementplans and emergency plans. TheContingency Program’s social assurancegroup on environmental studies, is activelyparticipating in the formulation of corporateguidelines for updating Ecopetrol’s

Social dimension323The company allocated $13,883 millionto assist victims of the emergencyin Dosquebradas, Risaraldaemergency plans, in specific regard to thesocioeconomic and cultural component,wherein it is sought to update the definitionand identification of the population locatedin areas affected by emergencies, aswell as to incorporate social aspects intothe assessment of risks from productcontainment loss.• Institutional strengthening. In 2012,development began of the risk managementmodel for the social component, throughwhich it is sought to design an interventionprocess aimed at stakeholders based onthe three components of risk managementincluded in Law 1523 of 2012 (risk awareness,risk reduction and disaster management),which will include roles, skills, abilities,knowledge, tools, instruments and relationswith the stakeholder institutions involved.Similarly, in the regions, implementationcontinued of the risk management programthat seeks to ensure the prevention andsuitable response to community risks arisingfrom the presence of business operations inthe territories. The program is carried out inpartnership with territorial entities, the RedCross and other organizations related to theissue of risk management.Response to theDosquebradas emergencyIn response to the Dosquebradas incident thatoccurred on December 23, 2011, Ecopetrol in 2012continued to provide humanitarian assistanceto the victims and established a process ofcoordinated intervention from Dosquebradas tolaunch programs in order to meet the needs of thiscommunity in all areas.The company allocated $13,883 million in threemajor lines to address different social initiativeswith the community:• Assistance for families (housing, health,humanitarian aid)• Risk management (community and institutionalstrengthening)• Social fabric (education, social infrastructure,strengthening of citizenship)Within the framework of these three interventionlines, in 2012 the following activities wereundertaken:• Support was ensured and provided in the processfor the physical and mental health of the victims;elective surgery with specialists; provision ofsupplies and medications necessary for therecovery of the affected population.

324The achievements in Dosquebradas have become a modelfor emergency assistance in Colombia, and an example onhow to face natural phenomena such as the harsh rainyseasons that have hit the country in recent years• Settlements were made with 94% of the relativesof the deceased and with the owners of thecollapsed homes.• Environmental remediation was carried out for allaffected soil, as well as remediation of 3.76 km ofthe Agual Stream’s channel.• There was follow-up and comprehensive care forthe 129 families reported in the official census.• 172 community leaders were trained in riskmanagement, by means of theoretical andpractical training workshops.• The Aguazul Village School was built, as was thefirst stage of the Ecological Park for Health andSport in the Villa Carola Neighborhood.• The Youth Leadership Network was created.These projects were carried out thanks to jointconstruction with the regional government(Government of Risaralda and DepartmentalAssembly), local government (Municipal Mayor’sOffice of Dosquebradas and Municipal Council),the Comptroller, the Attorney General, LegalRepresentatives, the Autonomous Corporation ofRisaralda (CARDER for its acronym in Spanish),the Ombudsman and the Chamber of Commerceof Dosquebradas.Ecopetrol carried out this work basedon collective construction with differentstakeholders in the territory, includingthe Community Action Board (JAC), LocalAdministrative Boards (JAL), the CitizenOversight Committees, the ParentsAssociations, the Territorial Planning Council(CTP), certain NGOs and various GrassrootsDevelopment Agencies (GDA), with whichRelations actionswith communitiesin Dosquebradas Action 1Action 2Establishment of a WorkingGroup for Risk Management andTerritorial Development, a bodyin which the company projects itssocial investment, in harmony andcoordination with its own interests,without overlooking those of themunicipality, the environment and thecommunity.Accountability to thecommunity in the company ofcommunity oversight committees,oversight bodies and agreementoperation entities.

the improvement path was defined for theprocess of social intervention with a localsustainable development approach, whichincludes neighborhood development plansand the intervention plan in District 10 and theAguazul Village.The results in terms of social oversight bythese stakeholders were significant becauseit was possible to have committees to assessprogress and quality, and at the same time, thenecessary decisions were made to optimize theopportunities for improvement in each of theactions undertaken.Additionally, as part of relations withcommunities, the following actions werecarried out:Action 3Carrying out of informativemeetings with families and thecommunity in general.Action 4Establishment of a permanentcommunity information office,to address concerns, complaintsand suggestions, which operatesin the Chamber of Commerce ofDosquebradas.

326THE DosquebradasLESSONThe Dosquebradas tragedy gave rise to Ecopetroldeploying an unprecedented emergency response.On December 23, 2011 Ecopetrol’s history sufferedan unexpected turn. That morning, a landslide,accelerated due to the heavy rains suffered by thecountry, affected the multi-purpose pipeline thattransports fuel between Puerto Salgar and Cartago,causing a spill that resulted in a fire that affecteda large part of the population of Dosquebradas(Risaralda).Thirty-three people killed, 110 injured, 129 familiesaffected, 106 houses affected, 81 pets injured and 31aqueducts damaged, was the outcome of one of themost dramatic chapters in Ecopetrol’s vast relationshipwith the environments in which it operates.As an immediate reaction to the event, Ecopetrolbegan a humanitarian operation and emergencyresponse management, deploying all possiblehuman and technical efforts to support the victimsof a population that has traditionally been in its areao f ​i n fl u e n c e .The company’s work was based, firstly, on itscorporate responsibility to strongly support thereconstruction and rehabilitation of the community,and secondly, on strict compliance with legalstandards including the decontamination andreplacement of plant material that was affected.Immediately after the tragedy, Ecopetrol appointed afield manager whose guidelines came directly from thehighest levels of the company, and assembled a team

Social dimension327Good practicethat organized the plan for the physical and socialstabilization of the municipality.“With the community and with local authorities wecoordinated a joining-up of recovery programs andbegan carrying this out throughout the year, to meetthe milestones that we set,” said Jaime Bocanegra,Dosquebradas Program Manager.Following this incident, Ecopetrol launched acontingency program so that mayors, relief agenciesand all those persons from communities involved inemergencies, take these procedures on board to dealwith contingencies.“We start from the operational risk managementmodel, which teaches us to assess the differentthreats in the environment and thus prevent thefuture materialization of such events in any of the3,100 communities that fall within the company’sarea of ​influence”, said Álvaro Salcedo, manager of theEcopetrol contingency program.in addition to other stakeholders such as hospitalsfrom the area, community leaders, citizen oversightcommittees, community action groups, educationalinstitutions, businesses and NGOs, among others.Since the beginning of the incident, there wascoordination with health agencies for the care ofpatients and the provision of equipment, medicinesand surgical equipment necessary for the treatmentof skin transplants.Equipment was also provided to relief agencies, suchas gas detectors, special suits for fire proximity,radios, uniforms and an ambulance. Additionally,advice was given for the creation of a specialcommission on oil spill emergencies and otherhazardous substances.In education, an agreement was signed withUniversidad Tecnológica de Pereira for the socialand comprehensive reintegration of the community,supported by psychologists, psychiatrists and socialworkers.Thus the Dosquebradas Program was born, focusedon three main aspects: people and their families, thesocial fabric and the operational continuity of thebusiness, through which, at the end of 2012, $12,500million had been invested in the response to this tragicevent. The main objective in 2012 was to join forceswith local authorities and agencies for the physicalstabilization and restoration of the social fabric ofaffected families and the community in general, withan emphasis on continuity and increased effortsin prevention, promotion and education regardingpotential emergency and disaster events.All the initiatives have been carried out throughjoint efforts undertaken with regional government,represented by the Government of Risaraldaand the Departmental Assembly; the localgovernment, through the Municipal Mayor’s Officeof Dosquebradas and the Municipal Council; entitiessuch as the Comptroller , the Attorney General,Legal Representatives, the Autonomous Corporationof Risaralda (CARDER for its acronym in Spanish)and the Chamber of Commerce of Dosquebradas,As part of this program, 280 people participated inworkshops that taught how to identify various risksthat may affect their community. Furthermore, 172people received their certification as risk managerson November 23, 2012.Moreover, considering that the event affected soils,vegetation and water, Ecopetrol carried out differentactions to mitigate the impact on affected areas.The impacted stretch of the Aguazul stream was fullyremediated, local aqueducts were restored, and 409.5tons of hydrocarbon-impregnated soil was subjectedto bioremediation, planting 3,419 native species.Ecopetrol has also joined projects from public ,community and private sector entities that seek topromote the improvement of the living conditions ofthe most vulnerable population.“It has been a process where there have been rapidresponses to requests made by ​the community,”said John Jairo de la Pava, Red Cross relief director,Risaralda branch.

328Monitoring of socialalerts and incidentsIn 2012, implementation of the regionalinterrelation plans continued, an initiativethat began in 2011 with the aim of stimulatinginteractive discussion with stakeholders,developing informed discussions between theparties, anticipating future challenges andprojecting medium and long term scenarios,through building and strengthening relationshipsof respect, trust and closeness.These meeting spaces enable the earlyidentification of situations of dissatisfaction onthe part of local communities and institutions,so that they can be analyzed and managed in atimely manner.For this, the company carries out continuousmonitoring of the alerts and incidents related tocommunities, in order to address, manage andprevent the occurrence of collective action thatcould affect operations.An alert is defined as an auditory or visualnotification indicating the occurrence orproximity of an incident that requires aresponse or preparation action, while anincident corresponds to a situation that couldbe or lead to an interruption of business,loss, emergency or crisis, while a social eventrefers to community collective action againstthe company such as blockades, protests orstrikes.Social events are addressed in aninstitutional, peaceful and concertedmanner, seeking solutions that benefit thedifferent parties.In 2012, there were 182alerts and 140 incidents for a total of 322social events, which represents a decreaseof 15% compared to 2011. Most social eventsoccurred in the Orinoco and MagdalenaMedio regions, with 45% and 30% of theevents, respectively (see Figures 58 and 59).Figure 58.Number of social alerts and incidentsAlertIncident235202182142146140766223302008 2009 201020112012Source: Ecopetrol, Vice Presidency of HSE and Operational Sustainability

Social dimension 329Figure 59.Number of social alerts and incidents by regionIncidentAlertTotal44639928225816414114318643875 8339 4281636421 1Magdalena MedioOrinocoSouthCaribbeanCentral - EastWestNationalSource: Ecopetrol, Vice Presidency of HSE and Operational SustainabilityThe main causes for the occurrence of social alerts and incidents that occurred in 2012 are detailed in Table 79.Table 79Causes of social events 2012Cause Number of Alerts % Number of Incidents %Demand for the local recruitment of labor 73 40 48 34Demand for the procurementof local goods and services22 12 22 16Impact on road infrastructure 20 11 16 11Noncompliance by contractors 25 14 10 7Environmental incidents 10 5 12 9Demand for social investment 9 5 12 9Dissatisfaction with the processesfor the negotiation of land and easements6 3 10 7Management by the State or other entities 3 2 3 2Deficiencies in relations 2 1 0 0Miscellaneous causes 12 7 7 5Total 182 100% 140 100%Source: Ecopetrol, Vice Presidency of HSE and Operational Sustainability

330Citizenship and democracyThroughout the year, Ecopetrol, alignedwith public policy, has embarked on variousprograms to support the development ofdemocracy and citizen empowerment.Overcoming extreme povertyIn order to support the national strategy forovercoming extreme poverty in Colombia,a partnership was signed with the NationalHydrocarbons Agency, the National Agency forPoverty Eradication, the National Mining Agencyand the Colombian Oil Association, throughwhich Ecopetrol will contribute to reducingextreme poverty in oil operation areas. In 2012,the intervention process in Barrancabermeja andCartagena began.Corporate GovernanceSince the enactment of the Law 1530 of May 17,2012, the territorial entities that want to accessresources from the General Royalties System inColombia, must present projects to the CollectiveManagement and Decision-making Bodies (OCADfor their acronym in Spanish). In partnership withFONADE, in 2012 Ecopetrol prioritized supportfor 20 projects to be presented to the GeneralRoyalties System, six of which have alreadybeen formulated and will be presented by the 10producing departments that have representation onEcopetrol’s Board of Directors. Also, in partnershipwith the World Bank’s IFC, in 2012 a strategy waslaunched to strengthen the project developmentcapability of 12 municipalities in five oil-producingdepartments.In the same vein, a series of Forums on “SustainableCities and Regions” were held with support from theSemana Magazine, in Barrancabermeja, Bogotá,Cali, Cartagena, Cúcuta, Neiva and Yopal, with theparticipation of 2,350 people and 103 panelists.Through this journey, it was possible to identifySigning of the Pact for Overcoming Extreme Poverty. Pictured: Samuel Azout,Mauricio Cárdenas, Orlando Cabrales and Javier G. Gutiérrez,, among others.

Ecopetrol Contribution toPeace and DevelopmentPrograms6,620 million20122012elements of the regional visions, as well as essentialelements for their development: infrastructure,human capital, social equity, diversification of localeconomies, better institutions and security.In 2012, the strategy to support the MonitoringCommittees for Investment Royalties continued,which enabled the creation of approximately 45citizen oversight committees in Sucre, MagdalenaMedio, Córdoba, Meta and Arauca, involving morethan 1,400 people.Regional Peaceand Development Programs (PDP)Since 2009, Ecopetrol has been a supportingentity of the National Network of Regional Peaceand Development Programs, which has enabled itto participate actively in the spaces, mechanismsand activities of the Network, facilitatingcoordination between the PDPs and strategicstakeholders for the country’s developmentand peace. Ecopetrol provided resources to beexecuted during 2012 and 2013, in the amount of$6,620 million, leveraging $15,730 million. Table80 shows the distribution of the resources.During 2012, regional impact projects wereundertaken, which together with the integrationof stakeholders and social innovation processes,enabled, among other achievements: strengtheningthe partnership for the conservation andsustainable development of the Páramo deSanturbán node (Norte de Santander), andhaving an ongoing territorial vision to achievethe conservation of natural resources, culturalidentity, the improvement in quality of life andcompetitiveness, through the creation of spaces formanagement and participation, and the creation ofpartnerships for public policy implementation.Table 80Contributions for Peace and Development Programs(Figures pesos)Peace andDevelopmentProgram (PDP)/regionEcopetrolContributionPDP LeveragingBajo Magdalena 60,000,000 1,150,000,000Consornoc 483,230,000 1,200,000,000Cordepaz 1,350,000,000 2,500,000,000Cordupaz (1) 80,000,000 150,000,000Cric 151,000,000 350,000,000Huipaz 164,500,000 250,000,000Magdalena Centro 226,667,000 1,900,000,000Magdalena Medio (2) 1,024,166,000 2,000,000,000Prodepaz 88,833,333 1,500,000,000Redprodepaz (3) 1,838,253,667 630,000,000Canal del Dique 415,300,000 1,500,000,000Tolipaz 164,500,000 800,000,000VallenPaz (4) 573,550,000 1,800,000,000TOTAL $6,620,000,000 $15,730,000,0001 Projects on Education, Peace and Human Rights2 Projects on Citizen Participation, Land Use Planning, Peace and Human Rights3 Projects on Strengthening and Strategy for the Magdalena River4 Projects on: Rural Economy and Planting PlanSource: Ecopetrol, Vice Presidency of HSE and Operational Sustainability

332During the 2012 period, social investmentby the Petroleum Foundations in whichEcopetrol participates, increased by 82.4%,equivalent to $138,220 millionRecognition was obtained from Redprodepaz tojoin the National Peace Council, as representativesof organizations working for peace in Colombia.The Knowledge Management strategy was alsoconsolidated, which made it possible supplement ororient knowledge management and disseminationwork of the Peace and Development Programs,through the dissemination of the LearningNetwork. Under this methodological framework,Redprodepaz proposed the transfer of specifictools that enable the management of relevantterritorial information. It specifically addressessystematization tools, case studies, best practicesand lessons learned.Petroleum FoundationsAs a key element for the execution of socialinvestment resources, Ecopetrol is supportedby six petroleum foundations, with which it hasstrengthened networking, has conducted jointplanning exercises, structured and executedprojects of national and regional scope, hasparticipated in the construction of public policy ofcommon interest, and has designed and developedpositive communication strategies.During the 2012 period, social investment bythe Petroleum Foundations in which Ecopetrolparticipates, increased by 82.4% comparedto 2011, increasing from $75,753 million to $138,220 million. Of the $138,220 million, $ 83,031million corresponds to resources from Ecopetrol(this investment is part of the company’s totaldirect social investment) and $ 55,189 millionrepresents funds provided by the foundations andother partners.Table 81 lists investment by each of the foundations.Table 81Petroleum Foundations Investment(Figures in millions of pesos)FoundationsECP ContributionContribution from otherinstitutionsTotalFundescat 54,162 6,331 60,493Fundesmag 12,440 36,736 49,176Alto Magdalena Foundation 5,173 9,326 14,499Amanecer Foundation 9,260 668 9,928Mamonal Foundation 1,493 2,029 3,522Alcaraván Foundation 503 99 602Total $83,031 $55,189 $138,220Source: Ecopetrol, Vice Presidency of HSE and Operational Sustainability

Social dimension333Good practiceBeneficiary of the AmanecerFoundation in CasanareA NETWORKOF PROGRESSSince the late eighties Ecopetrolbegan to establish and be themain protagonist in a series ofregional foundations that aimedto work hand in hand with thecompany’s social managementarea to strengthen good-neighborrelationships with the communitiesthat were part the area of influenceof its oil operations.Thus, in partnership withdepartmental and municipaladministrations, Ecopetrol ledthe birth, development andconsolidation of foundationsthat have covered the regions ofMagdalena Medio, Alto Magdalena,Orinoco and Catatumbo.Similarly, ​alliances were made withoil companies with which it hadpartnered for oil exploration andproduction projects, to encouragethe creation of foundations. Suchwas the case with Amanecer (inCasanare), where it teamed withBritish Petroleum and Total inthe nineties; Alcaraván (Arauca)where it partnered with OccidentalPetroleum; and more recently inthe first decade of the 21st century,with crude oil transport operatorssuch as Ocensa, in the Oleoductosde Colombia foundation.A special case was the MamonalFoundation (Cartagena) wherethe vast majority of companiesoperating in the industrial areajoined forces around a foundationthat acts under the direction of theANDI, Bolívar branch.In each of these sevenfoundations, Ecopetrol has playedan important role in turningthem into agents of regionaldevelopment in the territories, andin that sense has ensured theirfunctional, administrative and selfsustainingautonomy.However, it was in late 2009 thatEcopetrol made the decision toalign the programs, projects andagreements worked on by itsfoundations, under Ecopetrol’ssocial management policy.There was greater empowermentfor Ecopetrol to reorganizefoundations, and under agovernance exercise, it excludedregional actors that were notmaking contributions from theirboards.“Ecopetrol is starting to exercisefar greater power from thegovernance standpoint, anda paradigm shift can be seen,as now it doesn’t only see thefoundations as agents of regionaldevelopment, but also as toolsto further the company’s socialand environmental management,”says Gonzalo Murillo, foundationsleader in Ecopetrol, from the SocialManagement Department.Based on this principle, Ecopetrol’ssocial framework has beenclarified and self-sustainabilitystrategies for the foundationshave been defined. To this end,for example, the microcreditissues handled by the majorityof the foundations have begun tobe adjusted to the strategic linefor regional competitiveness andparticularly everything set out bythe production capabilities guidingprinciple, which governs withinEcopetrol’s social managementmodel. Under the perspectivethat we are following, the issue ofproject management must becomea source of income, adds Murillo.An example of this newscenario is Fundesmag, whichis prequalified to executeprojects from the environmentalmanagement plan for the refinerymodernization project.“Foundations have added significantvalue to the exercise of corporatesocial responsibility and haveincreasingly become an asset to theregion due to their transparency, theway they execute their resourcesand how they establish partnershipswith other actors in the territory,”commented Isabel Ampudia,director of the Association ofPetroleum Foundations.

334Responsibility toour contractorsFor Ecopetrol its 4,544 contractors are a substantial part of thebusiness’ sustainability and therefore there is an explicit commitmentto work with transparency and clear rules within a mutuallybeneficial relationship. In addition to ensuring full compliance withthe contractual terms between the parties, Ecopetrol promotesresponsible practices from its supply chain, within which it highlightsthe need to comply with international safety standards in thecontracted operation.

Social dimension335ContractormaterialityThe studies conducted throughout the year andthe information received through various entities,both on contractors and their employees, allowus to address activities carried out in 2012 thatseek to maintain an optimal relationship with thisimportant stakeholder.Thus, the issues addressed in this section cover:• Total procurement in Ecopetrol• Local and regional procurement• Wage standards for contractor workers• Weight of local procurement• Clear rules on procurement• Supplier development program• Oil and Gas cluster in Barrancabermeja• National supplier event• CSR Practices contest for EcopetrolcontractorsIn 2012 Ecopetrol had 4,544 goods and servicescontractors, of which 356 were foreign and 4,188domestic (see Figure 60).In 2011, there were 32,060 contractor workers inEcopetrol, while in 2012 there were 40,255. Figure61 lists the number of contractor employees andtheir variation over the last three years.Figure 60.Number of contractor companiesFigure 61.Number of contractor employees4,0334,158DomesticForeign40,25532,95432,0604503562011 2012Source: Ecopetrol, Strategic Supply Department2011 2011 2012Source: Ecopetrol, Strategic Supply Department

336Table 83 details Ecopetrol’s total procurement,broken down by goods and services, distributedby region.Table 83Procurement of goods and services by region(Figures in pesos)Total procurement in EcopetrolFor 2012, Ecopetrol’s total procurement was$15,215 billion, representing an increase of 16%compared to 2011, when its contracting amountedto $13,103 billion.Ecopetrol’s total procurement consists of goodsand services. Table 82 describes these values.Request type Region Area Value procuredGoods 1,921,474,660,414Apiay 19,132,082,970Barrancabermeja 61,127,744,049Bogotá 1,600,719,170,606Bucaramanga 26,159,240,449Cartagena 46,770,991,,593Table 82Distribution of total procurement(Figures in pesos)Casabe 16,126,893,898Cúcuta 18,570,661,418El Centro 41,678,432,079Request TypeGoodsServicesOverall totalValue procured1,921,474,660,41413,294,060,035,03515,215,534,695,449Neiva 30,554,398,849Orito 32,286,235,473Tibú 12,683,814,166Yopal 15,664,994,863Services 13,294,060,035,035Apiay 28,823,119,626Source: Ecopetrol, Strategic Supply DepartmentBarrancabermeja 202,940,538,617Bogotá 12,626,802,611,776Bucaramanga 94,319,004,377Cartagena 68,273,404,928Casabe 30,871,768,394Cúcuta 8,087,685,676Cupiagua 10,818,064,618El Centro 77,245,842,461Neiva 42,209,846,727Orito 55,678,947,090Tibú 29,895,203,853Yopal 18,093,996,892Overall total 15,215,534,695,449Source: Ecopetrol, Strategic Supply Department

Social dimension337Local and regional procurementFor the definition of domestic procurement,Ecopetrol has a strategy based on theclassification of goods and services throughcritical categories, namely: energy, constructionand maintenance, oil services, piping, equipmentpurchases and engineering. As a supply strategy,there is a guide for the establishment of localprocurement, which is disseminated in differentscenarios of interaction with suppliers andcommunities. The formalization of this strategyhas made it possible to maintain a sustainedincrease in local procurement, a target that yearafter year is formalized through managementindicators that are part of the company’s valuepromise to its stakeholders. Table 84 shows theamount for regional procurement (local plusarea of influence) in addition to the procurementthat is carried out in the rest of the country andexecuted in each region. The sum of the twosets of procurement gives the company’s totalprocurement.Table 84Local procurement broken down by location(Figures in pesos)Region Area of Interest Region Total CountryprocurementTotal procurementApiay - CastillaBarrancabermejaBucaramangaCantagalloCartagenaCasabeCúcutaEl CentroNeivaOritoTibúYopalOthersLocal 92,026,144,303Area of Influence 71,518,047,708Local 504,979,540,362Area of Influence 87,740,657,045Local 118,011,666,954Area of Influence 228,569,078,555Local 1,554,624,118Area of Influence 1,905,042,671Local 148,876,229,840Area of Influence 141,804,627,056Local 4,305,171,359Area of Influence 36,906,181,857Local 150,731,399,111Area of Influence 4,594,892,120Local 27,564,351,601Area of Influence 42,075,369,858Local 96,353,571,603Area of Influence 32,002,825,474Local 135,921,365,681Area of Influence 4,308,188,743Local 10,620,089,872Area of Influence 9,861,997,728Local 38,254,070,348Area of Influence 21,094,638,119Local 58,942,660,870Area of Influence 400,909,051,326163,544,192,010 3,202,105,279.440 3,365,649,471,451592,720,197,407 1,527,871,468,499 2,120,591,665,906346,580,745,509 345,508,224,952 692,088,970,4613,459,666,789 325,210,656,197 328,670,322,987290,680,856,897 796,744,645,057 1,087,425,501,95341,211,353,216 257,520,478,901 298,731,832,117155,326,291,231 209,615,984,747 364,942,275,97769,639,721,459 420,293,008,906 489,932,730,365128,356,397,077 292,057,934,733 420,414,331,810140,229,554,424 318,961,493,348 459,191,047,77220,482,087,600 194,820,784,190 215,302,871,79059,348,708,467 406,190,296,659 465,539,005,126459,851,712,196 4,447,202,955,537 4,907,054,667,733Total DomesticProcurement2,471,431,484,282 12,744,103,211,166 15,215,534,695,448Source: Ecopetrol, Strategic Supply Department

338Wage standardfor contractor workersEcopetrol establishes a wage standard for theemployees of contractors depending on whetherthe activity to be contracted is inherent to the oilindustry or not. These policies can be extendedto the employees of subcontractors approved byEcopetrol.Activities that are inherent to the oil industryare framed in accordance with that provided byDecree 3164 of 2003 from the Ministry of Minesand Energy. When contracts are entered intothat include activities inherent to the industry,Ecopetrol extends the provisions of CollectiveLabor Agreement to the employees of contractors.This agreement, the product of negotiationbetween the company and its unions, sets wages,statutory and non-statutory benefits, and otherbenefits that have been agreed.For contracted activities that are not inherent tothe oil industry, Ecopetrol has issued certain wageregulations since 2006 that set wages according tolabor market conditions.On November 1, 2009, a new wage standard wasissued for activities not inherent to the oil industrywith a salary table that enables fair and equitableremuneration for employees, in accordance withthe roles they carry out on an exclusive basis for thecontract to which they are linked. The table on wagelevels for activities not inherent to the oil industrysets out the description of levels and categoriesaccording to the job profile, taking into accountaspects such as experience, skills and knowledge ofthe personnel that will fill the vacancy.Management System, which relate to WageStandards for contractor workers.Weight of local procurementBarrancabermeja and Tibú are the regions where2012 procurement represented the greatest weightin regional finances.Tables 85 and 86 describe the procurement in2011 and 2012, respectively, compared to thecorresponding municipal budgets.Clear rules in procurementEcopetrol has established a commitment to itsstakeholder, Contractors and their Employees,which talks about “transparency and clear ruleswithin a mutually beneficial relationship.” To achievethis, it has a number of mechanisms:Procurement ManualIn 2012 Ecopetrol published the new ProcurementManual, which defines five types of selectionprocesses:• Direct procurement• Closed tender• Open tender• Closed multiple-party negotiation• Combined processDuring the 2012 period, an update was performedfor the documents of Ecopetrol’s Quality

Social dimension339Table 85Municipal budgets versus local procurement in 2011(Figures in millions of pesos)LocationMunicipal BudgetCumulative LocalProcurement(includes area of influence)Procurement percentageApiay 318 72 22%Barrancabermeja 323.60 694 214%Bogotá 12,200 4.42 36%Bucaramanga 550.90 47 9%Cartagena 1,256 142 11%Cúcuta 407 13 3%Cupiagua 51 28 18%Neiva 299 147 49%Orito 27 155 582%Tibú 9 34 175%Source: Ecopetrol, Strategic Supply DepartmentTable 86Municipal budgets versus local procurement in 2012 (Figures in millions of pesos)LocationMunicipal BudgetCumulative LocalProcurement (includes area ofinfluence)Procurement percentageApiay 320 164 51%Barrancabermeja 311 593 191%Bucaramanga 761 347 46%Cantagallo 16 3 22%Cartagena 1,067 291 27%Casabe 48 41 86%Cúcuta 439 155 35%El Centro 681 70 10%Neiva 278 128 46%Orito 174 140 81%Tibú 3 20 175%Yopal 148 59 40%Source: Ecopetrol, Strategic Supply Department

340At December 31, 2012, Ecopetrol had31,003 evaluated contracts, representing5,352 suppliers.The new Ecopetrol Procurement Manual wasapproved by the company’s Board of Directors andthe reform was made ​in accordance with the currentregulations, responding to market conditions.Within the company, 3,000 people nationwide weretrained in the new Manual and another 1,000 incontractual legal issues (contract management andadministration).Supplier performance evaluationSince September 2006, all Ecopetrol’s suppliersand contractors are monitored through theContractor Performance Evaluation, which makes itpossible to monitor performance in critical aspectsfor the organization and the community, such astechnical specifications, meeting deadlines andadministrative aspects, HSE and corporate socialresponsibility.This Performance Evaluation has completetraceability in order to establish historicalperformance against Ecopetrol’s requirements.Their results are communicated to contractors.Taking into account the contracts completed inthe last three years, with a cut-off at December 31,2012, Ecopetrol has 31,003 evaluated contracts,representing 5,352 suppliers.Since July 2008, the evaluation and the fulfillmentof obligations by contractors have been used tomake decisions about invitations to participatein selection processes, the allocation of scores ortender tie-breaking.Transparency mechanismsIn 2012, Ecopetrol carried out a restructuring ofthe Contractors section of the website, whichincluded issues such as the New Supplier ServiceModel and the events held at the various locations.Also posted are all contractual regulations andprocedures that govern the Goods and ServicesSupply Service.Based on the principle of transparency, Ecopetroluses timely and accurate information disclosurepractices about its procurement processesthrough the website, at the following link: http://contratos.ecopetrol.com.co/default.aspxCommencement of contractsEcopetrol, through the administrative office,holds a meeting with the contractor, which marksthe formal commencement of the implementationphase of a project or contract wherein the plansand programs defined for each functional area ofEcopetrol are disseminated and the contractoris guided to ensure that their HSE plans andprograms are aligned with the plans andprograms of the businesses, ensuring effectivemanagement that meets the HSE guidelines andrequirements currently embodied in the HSEFocus Guide.At this meeting, the following activities are alsocarried out:• The contractor is introduced to the teamresponsible for monitoring implementationof the contract, defining the roles andresponsibilities of each.• A coordination procedure is signed andthe communications channels during theundertaking of the contract or project areindicated.• The objectives of the contract are drawn up ordefined.• Questions or concerns regarding the contractare clarified.• Basic aspects of the implementation arediscussed, such as schedules and risks thatmay affect them, reporting levels, etc.

Social dimension341Similarly, they are informed of the areas wherethe works will be carried out or the serviceprovided, and they are introduced to the peopleresponsible for these areas.It is important to mention that for the specificcase of HSE, the administrative office isresponsible and ensures the registration andapproval of levels I, II and III of the course forthe promotion of sound, safe, clean and healthywork. In turn, professionals from the contractoffices actively participate and leverage the workplans derived from HSE contractor committees,ensuring the implementation of those plans withcontractors. Similarly, the offices leverage thedissemination and implementation of corporatecampaigns, the process safety program andoperational excellence model in HSE, which areestablished by Ecopetrol on the issue.CSR ProcedureIn December 2008, Ecopetrol issued theCorporate Social Responsibility (CSR) Procedurefor contracting and subcontracting. The latestversion of the CSR Procedure, which came intoforce on October 30, 2012, includes the followingchanges, among others:• The application of Law 1551 of 2012, underwhich mayors of the municipalities must certifythe local workforce.• Requiring 100% use of unskilled labor and 30%local skilled labor for the execution of contracts.• Assigning points in the selection process forbidders that offer and commit to: hiring morethan 30% of the local skilled workforce, carryingout social investment or submitting tenders inpartnership with a local supplier.• Inclusion of criteria on the First-timeEmployment Law and Contracting of MSMEs.• Extending Ecopetrol’s Local Procurement Guideto subcontractors.This procedure is part of the selection processdocuments and is posted on Ecopetrol’s website.In 2012, these changes to the procedure wereshared with 100 business representatives andEcopetrol staff.Supplier development programIn 2012, Ecopetrol continued the SupplierDevelopment Program, addressing Ecopetrol’sdifferent areas of operation and interest. Theobjective of this program is to develop regional andlocal contractors and suppliers in the company’sareas of operation, targeting competitive businessmanagement, adding value in order to meetmarket demand.The scope of the Supplier Development Program issummarized in:• Achieving companies’ greater competitivenessin order to successfully meet market demand,increasing employment, local subcontractingand quality, minimizing financial, environmentaland social risks, and thus contributing to abetter quality of life in the regions.• Ensuring that Ecopetrol’s contractors have aCorporate Responsibility plan that is alignedwith the guidelines that Ecopetrol has in thisregard.• Establishing links with companies in the oilindustry and other private and state entities inorder to create opportunities for strengtheningand developing regional and local suppliers.The results of this program in 2012 are describedin more detail in the Community and Societysection of this chapter, specifically in the RegionalCompetitiveness projects line.

342BIG TRAININGFOR THELITTLE GUYSWith training programs in quality management andissues such as social responsibility, occupationalhealth and logistics operations, Ecopetrol aims tocontribute to strengthening its local suppliers andmicro-entrepreneurs.Gloria Amparo Rodríguez, Isidro Gutiérrez and JennyRopero are employees from three different smalland medium enterprises from the municipality ofTibú, Norte de Santander, but they have a commondenominator: in recent years they have seentheir lives and their businesses change thanks toEcopetrol’s support. Like them, over 600 micro,small and medium enterprises in all regions whereEcopetrol operates have been involved in trainingand business strengthening programs that thecompany has made available to them.Gloria Amparo, for example, is the administrativeprofessional of the Farmaserintsa drugstore, oneof the largest four in Tibú, which conducts thedispensing and supply of medicines to Ecopetrolpersonnel in the area. In 2012, she completeda diploma that gave her the tools to implementstandard OHSAS 18001 in her company, as well asknowledge in logistics operations. As of June 7, 2012she also became an internal auditor on managementsystems for industrial safety and occupationalhealth.This relates to the component on the localstrengthening of MSMEs, which forms part of theProduction Capabilities program that Ecopetrollaunched in 2010 and whose aim is to train localbusinesses so that they have quality standards, are

Social dimension343Good practiceproductive, competitive and sustainable, as wellas generate decent jobs and strengthen supplyand distribution chains for economic activitiesin the territory. “We realized that by opting forthe promotion and business strengthening ofMSMEs, we can directly influence the sustainabledevelopment of communities and can generatepositive impacts,” says Vanessa del Sol Constaín,Social Management professional from Ecopetrol.With these types of programs, Ecopetrol also seeksto ensure regional competitiveness as part of itsstrategy to fulfill the value promise it has with theSociety and Community stakeholder: to participatein the country’s sustainable development within aframework of shared responsibility and respect forhuman rights.“In recent years we have invested $17,000 million in858 processes such as quality management, projectdevelopment and business strengthening issues, inorder for them to be competitive. Certifications arethe proof that these entrepreneurs generate greaterinnovation and improvement in service delivery,”says Lina Beatriz Durán, head of Ecopetrol’sSupplier Relations Unit.To undertake the program, Ecopetrol is supportedby two strategic partners, with which it signedrespective inter-institutional agreements.The first is carried out by the Joint Venturecomprising Corporación Calidad and UniversidadJorge Tadeo Lozano, entities that have a team of44 professionals who are responsible for teachingdiploma courses in logistics operations and theimplementation of OHSAS 18001, as well as trainingin quality management. Germán Perea, professor ofthe University, leads this strengthening program thatcovers 200 small businesses located in Cartagena,Cúcuta, Yopal, Barrancabermeja, Villavicencio,Neiva, Orito, Cali, and certain municipalities inMagdalena Medio and Tibú.“The main objective is to make the companies in theregion become more solid, remain over time, anddevelop tools to be better and more competitive,”said Perea.One of the best examples is Suministros yConstrucciones Gutiérrez (Gutiérrez Supplies andConstruction), a small business in Tibú, whichin the past eleven years has been a supplier ofEcopetrol in the area of chemical supplies and hasbeen contracted for the miscellaneous servicesfor green areas and maintenance of drinking watertreatment plant for the Catatumbo OperationsSuperintendence.“In my case, I’ve participated in several trainingson all kinds of topics such as industrial safety,occupational health, quality management systemsand labor reform; in short, everything to do withbusiness training. These courses open doors for usto have an understanding of what affects a companyand how it should be formed, “said Isidro Gutierrez,legal representative.The program also aims toward one of the three linesdesigned by Ecopetrol’s social management areasto integrate the expectations of the Society andCommunity stakeholder with the interests of thecompany: to promote responsible practices.Therefore, supplementary to the businessstrengthening program, Ecopetrol has a secondagreement, signed with Confecámaras. Thispertains to business support and strengtheningbased on standard ISO 26000.“We have found companies that have no socialresponsibility training and, for them, trainingsessions of eight hours each are carried out with theVincular firm and other in-house consultants in orderto create a diagnostic to build a gap closing matrixin relation to ISO 26000, “says Cilia Mejia, programdirector in Confecámaras.The consultants are responsible for all the trainingsessions, and then a number of tutors come into play,which carry out consulting in each of the companiesand work directly with the small business owner.

344Oil and Gas Clusterin BarrancabermejaIn 2012 work continued on the development of theOil and Gas Cluster, an initiative that is being carriedout for the first time ​in the country, as part of theNational Competitiveness System.Barrancabermeja was established as the epicenterfor its undertaking, considering its location, giventhat it is a central hub for oil companies andrelated industries in Magdalena Medio, as the threepetroleum industry businesses are concentratedthere (exploration and operation, refining andtransportation) and it is also where 75% of thenation’s crude is processed.The objective of the Cluster is to turn MagdalenaMedio into a competitive region, where productivityand efficiency can be increased, as well asencourage and enable innovation, facilitatingmarketing based on development initiatives.From the point of view of competitiveness, theCluster project seeks to increase productivityand efficiency, encourage and enableinnovation, and facilitate marketing basedon development initiatives. This initiativehas been worked on in partnership with theChamber of Commerce of Bucaramanga,Santander Competitivo, the Mayor’s Officeof Barrancabermeja, the Government ofSantander and Universidad de los Andes.National suppliers eventEcopetrol held Suppliers Recognition 2012- Building a country, a platform where itpraised and acknowledged excellence in theperformance of its contractors. The eventwas attended by 400 entrepreneurs fromdifferent regions in Colombia and othercountries.Within this platform, recognition was given tothe best suppliers based on their approvedaverage final performance evaluations, forcontracts completed during the period from1 August 2011 to 31 July 2012.CSR Practices Contestfor Ecopetrol contractorsIn 2012, Ecopetrol held a contest for the first timeto highlight the socially responsible practicesof its contractors, especially those that wereinherent to sustainable development and thatgenerate progress in its regions.22 nominations were received from differentparts of the country. After application of theevaluation criteria by an internal committeefrom the company, seven initiatives wereshortlisted, which passed to final definition by agroup of delegates from the Ecopetrol SteeringCommittee, which selected four finalist practicesthat stood out for being innovative, sustainableand aligned with their business strategy.Community Development Association submittedby the TIPIEL company.It is worth noting that in order to promote theimplementation of the Global Compact principlesamong the company’s contractors, the contestcandidates had to sign a declaration form oncommitment to the principles.The contest’s four finalists are listed in Table 87.During the Supplier Recognition event held inBogota on November 8, 2012, the audienceselected the winning practice via a live vote,with the winner being the Let’s Shop Together

Dimensión Social 345In Ecopetrol, the supply of goods and servicesare classified into the following categories:consumables, necessary, critical, enabling,according to impact/risk and supply time.Therefore, the Award for Performance Excellence2012, was presented in accordance with this sameclassification.Supplier recognition event 2012 - Building a countryThe winners were:• Consumable Goods Category: Luis FranciscoOrtiz Pascuas - Purchase of Printed Forms• Consumable Services Category:Traduciendo Ltda.• Necessary Goods Category: Ferretería Central• Necessary Services Category MultiserviciosIndustriales Ltda.• Critical Goods Category: FábricaCarioca de Catalizadores• Critical Services Category:Consorcio Geomática Ecopetrol• Enabling Goods Category:FEPCO Zona franca S.A.S• Enabling Services Category:Worley Parsons International Inc.From 2012, Ecopetrol extendedthe award for performanceexcellence 2012 to localsuppliers, with the winner beingMiguel Antonio Velásquez Arjona,from the city of Villavicencio.Table 87CSR Practices Contest WinnersContractor company City PracticeARCOMATCompany that provides engineering services,specializing in consulting, construction, maintenance,rehabilitation, inspection and auditing ofinfrastructure for the storage and transportation ofhydrocarbons. It has provided services to Ecopetrolfor 8 years.BogotáSupport for Local and RegionalDevelopment “Democratic Selection ofLabor”JOSE MARÍA VARGAS MOTTAFamily business, established 15 years ago, has 80employees and is dedicated to the constructionof civil and electrical works, general services,environmental remediation of locations, cleaning,catering and facilities maintenance.NeivaConstruction of Ecological WarehouseLa Cañada Farm

346ULTINSACompany with 20 years of experience at the nationallevel, develops products and services for the oil,mining and gas industry, including biodegradablecleaning systems for storage tanks, plants andindustrial equipment. Currently generates more than190 jobs.BarrancabermejaComprehensive Replacement of theConventional Tank Cleaning System withClean TechnologiesTIPIELCompany dedicated to the production of varioussolutions in the industry for asphalts, paraffins,household cleaning and fuel additives nationwide. Ithas provided services to Ecopetrol for five years.BogotáLet’s Shop Together CommunityDevelopment AssociationSource: Ecopetrol, Strategic Supply DepartmentRegional events with suppliersIn 2012, Ecopetrol continued holding RegionalEvents with Suppliers, involving 969 companies.The fifth version’s central theme was StrengtheningSuppliers as a Strategy for Growth andSustainability.These spaces lasted four hours, and reportedresults in each area regarding Ecopetrol’smanagement in 2012 and the company’s2013 projections in each of the areas.Additionally, contractors had the opportunity toparticipate openly, make proposals and resolvetheir concerns regarding the issues addressed.The events were held in Magdalena Medio,Villavicencio, Neiva, Cartagena, Yopal, Bogotá, Tibúand Orito.Meetings with suppliersAs one of the supplier relations mechanisms,in the second half of 2012 regular monthlymeetings were established with suppliers,in the cities of Bogotá, Barrancabermeja,Cartagena and Villavicencio.These two-hour spaces are intended toinform business owners interested in learninghow to be Ecopetrol suppliers, on issues ofinterest such as the supply model, supplierinformation system, among others, as well asto listen to the concerns of business owners.The 17 meetings in 2012 were attended by1,107 business owners.Due to the good reception received 2012,this relations space will be extended to alllocations where Ecopetrol operates in 2013.

Social dimension347TestimonialÁlvaro González RodríguezManager of Insurcol“We’ve had a businessrelationship with Ecopetrol formore than 20 years, when wewon a tender that consistedof providing piping for theBarrancabermeja refinery asquickly as possible and under thehighest standards of delivery.From there we have undertakenseveral projects for thecompany, achieving outstandingperformance ratings, higher than97%, both in terms of works andthe supplies we provide.Without a doubt, Ecopetrol hasbecome our main customerand has been a great leader insustainability. Through varioustraining programs, they havemade it possible for us tostrengthen competencies, skillsand knowledge on issues of socialresponsibility and sustainability,and have shown us that, morethan their suppliers, we are theirallies and they have a genuineinterest in our sustainable growth.At Insurcol, we have alwaysfollowed a path of respect andtrust towards our stakeholders,the environment and humanrights. To do this, we have qualityprocesses that are duly assuredand managed. We have alsoimplemented innovative practicesto protect and improve the workenvironment, ensuring issuessuch as industrial safety andcomprehensive health for ouremployees.All our actions go beyond the legalor minimum required. Our mainassets are our employees andcustomers. We work with highlevels of quality with them, fromthem and for them. We know thatthrough culture, commitmentand respect, we become betterand better for our families and forsociety in general.We have an HSE practice called‘Room of life’, through which weseek to prevent, in a differentand more enjoyable way, theoccurrence of unsafe behaviors:at operating sites, we adapt aroom where workers who havecommitted unsafe acts come in.We give them a snack, a relaxingmassage and then we show filmsrelated to the reason for whichthey were sent to the room.Once they become aware ofwhat their failure was, they signa commitment to be examples ofsafety to their peers.For all this type of work, inMarch 2012 we obtained thehighest standard awarded bythe international organizationForética from Spain, inpartnership with SGS deColombia, we accredits us as thefirst Latin American companycertified in ethical and sociallyresponsible management understandard SGE - 21.For us it has been a great honorand a tremendous challenge thata Colombian company, born fromthe depths of the department ofSantander, is a model of socialresponsibility in Latin America.”

348Relations withshareholdersEcopetrol’s commitment to its shareholders is to ensure thesustainability of the business through ethical, transparent andresponsible management. To do this, in addition to maximizingthe value of the shares, it must maintain a relationship thatenables all its 458,117 shareholders to be aware the socialand environmental management performed by the company,because it is on this that long-term success depends.Shareholders General Assembly 2012

Social dimension349Materiality of stakeholderrelationsFew companies in the world, and no otherin Colombia, have such a large number ofshareholders. This characteristic results inEcopetrol annually analyzing, through variousmechanisms, the many concerns amongthis diverse group, to provide a proactive andpermanent response.Thus, this report addresses overall figures foractions that have been undertaken throughoutthe year, which has been divided into:• Shareholder service channels• Shareholder satisfactionAt December 31, 2012 Ecopetrol had 458,117shareholders, representing a decrease of9.94% compared to the 508,000 shareholdersat the same date in 2011. Of the 458,117shareholders, 455,764 are natural persons and2,353 are legal entities.Shareholder service channelsIn 2012, a total of 327,688 petitions, complaints,claims and requests were received fromshareholders through the service channels.This represents an 8.15% decrease comparedwith those received in 2011. The level of timelyresponse to shareholder requirements in 2012was 99.98%.Table 88 sets out the behavior of shareholderservice channels in 2012.Table 88Shareholder service channelsCanalNumber of petitions,complaints andclaims receivedPercentageshareCall Center 232,337 70.9%Loyalty Plan* 51,157 15.6%E-Mail 26,947 8.2%Chat 10,416 3.2%CPO 6,100 1.9%Written 731 0.2%Total 327,688 100%(*) Includes: Bus, Mobile Stand, Stand in Corferias, DNP Fairs, Public Audiences, Chat “Theshareholder has the floor” and the Shareholders General Assembly.Source: Ecopetrol, Vice Presidency of Corporate FinanceShareholder satisfactionIt is worth noting that within the managementof shareholders, during 2012 a Service QualityPlan was carried out, focused on measuring thesatisfaction of shareholders in areas such asservice, information and solutions offered to theirinquiries and requests, and undertaking actionplans to address the dissatisfaction that arose.Satisfaction was measured through a randomsurvey to all those who made contact through anychannel. A total of 3,377 surveys were completed,which resulted in a satisfaction level of 97%. Theremaining 3%, shareholders who were not satisfiedwith the information, solutions and serviceprovided, was mainly due to issues related to the

350TestimonialLina Vanessa Varela FitzgeraldShareholder from Armenia“I was born 21 years ago inArmenia, in the coffee-growingregion, amid a beautiful familyconsisting of my two parents anda brother. We’re very close andretain the traditional values of“Paisa” ​families.When I turned 15, my parentsdecided to organize a specialparty for me and told the gueststhat instead of gifts, to give meenvelopes with money. At thattime it was customary and all myfriends, family and acquaintanceswere very generous.At that age I was tempted to buyclothes, superficial things typicalof a girl, or to plan a trip. Butthanks to the family’s advice Iopened a Term Deposit Certificate(CDT for its acronym in Spanish)and learned the importance ofsaving. Two years passed andwe heard the announcement ofthe capitalization that Ecopetrolwas preparing. My mom, whois an economist, advised meto buy because it was the bestcompany in the country, withsound finances and a great future.So I withdrew my savings andinvested in the shares. From timeto time I read about the share’sperformance in the newspapers,and when the time came toreceive dividends, I refrainedfrom using them. Also, within thefinance class they gave us duringthe business administrationdegree, teachers told us aboutthe different types of investmentsthat exist in the market and therisks posed by illegal moneyschemes, which in 2009 werepopular and wherein I knewseveral people who lost a lot ofmoney. All these teachings andexperiences allowed me to strictlymanage my finances, and gaveme extra confidence to keep mysavings in Ecopetrol.In early 2012, I knew that theEcopetrol shareholder bus wouldmake a stop in my city, and I wentto find out how much money Ihad. I was pleasantly surprisedbecause I knew that the value ofthe shares had been rising, but Inever thought by that much! Forseveral years I had fought myurges to spend on treating myselfor trivial things, but then I realizedthat this was the opportunity tobegin to fulfill my dream of buyingmy own home.The opportunity arrivedwhen I started working with aconstruction company in theregion, which undertakes housingprojects in Armenia. They gaveme good payment terms and myparents encouraged me to usethe money from the shares in theproject.Today, I think I have matured as aperson. I passed from childhoodto adolescence, and from thereto youth, hand in hand withEcopetrol’s shares; and they weregreat company financially!”

Social dimension351non-payment of dividends by brokerage firms anda lack of knowledge of the stock market.To improve service quality, meetings were held withStock Brokerage Firms in order for them to reporton dividends paid and payable, and campaigns wereconducted to encourage shareholders to collect theirdividends. With regard to the lack of knowledge ofthe stock market, the educational plan will continueduring 2013. The following summarizes the behaviorof each service channel:Call CenterIt is the most important channel of communicationwith shareholders. 232,337 calls were receivedduring 2012 with a response level (calls received/ calls answered) of 98% and a service level (callsanswered within 20 seconds) of 89%.Loyalty PlanDuring 2012 we continued the shareholder LoyaltyPlan, whose purpose is to provide personalizedservice through seven channels: Shareholder Bus,Mobile Stand, Corferias Stand, Shareholders GeneralAssembly, Chat, National Planning DepartmentFair and Public Audiences. Through these channels,we welcomed a total of 51,157 shareholders in 74municipalities nationwide. The Shareholder Bus, with35,640 service instances, was the one that providedthe greatest number of responses to the concerns ofshareholders.Table 89 shows the various loyalty channels andthe service provided in each.Table 89Shareholders served in loyalty channelsLoyalty channelsNumber ofshareholders % shareservedShareholder Bus 35.640 69,7%Mobile Stand 9.499 18,6%Corferias Stand 3.130 6,1%ShareholdersAssembly2.151 4,2%Chat 521 1%National PlanningDepartment (DNP)Fair144 0,3%Public Audiences 72 0,1%Total 51.157 100%Source: Ecopetrol, Vice Presidency of Corporate FinanceOther means of shareholder relations areemail, the shareholders chat, the ShareholderService Office, information campaigns andthe receipt of various petitions and requestsby written means.INFORMATIONCAMPAIGNSAs a supplementto the work donewith shareholdersduring 2012,Ecopetrol undertook36 outboundinformationcampaigns, wherein215,735 shareholderswere contacted.These campaignswere focused onissues of interestsuch as dividendpayments, personalinformation updates,the liquidations ofProyectar Valoresand Interbolsa,among others.WRITTEN MEANSA total of 162 rightsof petition and 569written requestswere received. Therights of petitionwere answered100% within theperiod prescribedby Law (15business days).Shareholderservice officeAt the office inBogotá, 6,100shareholders werepersonally served in2012. The number ofvisits has decreaseddue to betterpositioning of theother non-contactservice channels.EMAILA total of 26,947emails were receivedin 2012.SHAREHOLDERSCHATIn 2012 a total of10,416 querieswere addressed,positioning thischannel as the fourthmost importantchannel.

352THE BUS WITH140,000 PASSENGERSIn reaching its fourth year of operation, Ecopetrol’sMobile Unit - the famous shareholder bus - hasbecome one of the main mechanisms of loyaltyand support for minority shareholders across thecountry.Carmen Anaya is a typical coastal matron of 70years of age, a widow with four children and fivegrandchildren. Because of her health difficulties shehas stopped using public transport to travel aroundSanta Marta, her hometown. But this past October24 and after many years, she was back on a bus. Avery special bus: the one for Ecopetrol shareholders.Since mid-2007, when she became a shareholderin the country’s leading company, Carmen alwayskeeps track of the performance of her investmentand all the news that is reported on Ecopetrol. Sowhen she heard that a bus for shareholders wasto make a stop in one of her city’s major shoppingmalls, she dusted-off the documents accrediting heras a shareholder, got her ID card ready and becameone of the first people to get on it.The bus or mobile shareholder service unit, is adirect means of communication that Ecopetrolcreated in 2009 to implement one of the objectives ithas set with this stakeholder, which is strengtheningrelationships with its shareholders and investors.

Social dimension353Good practiceIn exactly four years of visiting the capital citiesin particular, the bus managed to reach 140,000people served at the end of 2012. This populationis equivalent to one third of the company’s totalshareholders throughout the country.“We have wanted to look out for the smallshareholder, in other words, people that don’t knowa lot about the stock market and put in a greatfinancial effort ​to make this investment. With thebus, we reached that vast majority of shareholders,”says María Angélica Jara, a professional fromEcopetrol’s Shareholder Service Coordination andwho has accompanied many of the tours since 2009.This communication channel not only has thefunction of addressing and resolving the concernsof shareholders, but to teach them a little moreabout the investment they have made through thepurchase of securities in Ecopetrol.Concepts such as dividends from earnings,secondary market operations and the role played bystock brokerage firms, often come to the fore amongminority shareholders. In fulfilling its role in socialresponsibility and its retention commitment to thisstakeholder, Ecopetrol has trained staff that adviseon these issues, through its mobile unit.shareholders through so many different channels ofcommunication, “said Zamora, who belongs to thecompany Contact Center Americas, contracted byEcopetrol to provide such services.With the passing of time and thanks to theexperience gained, the bus has been adapted tothe needs and conveniences of its audience. Forexample, inside, there is a special module for serviceto people with disabilities and waiting areas arefriendlier.In terms of technology, there is directcommunication with the brokerage firms, becauseduring the bus’ first runs, it was identified that thecharges made by these firms is one of the issuesthat are subject to constant questions from smallshareholders.Zamora also highlights the pedagogical workundertaken during service on board the bus. “Wehelp shareholders become familiar with the languageused in the market because Ecopetrol wants themto know everything about their investment, thepossibilities they have and the mechanisms availableto answer their questions. Upon completion ofthe service, the shareholder fills in a satisfactionsurvey,” she adds.María Fernanda Zamora is one of the advisers on thebus and ​jokingly says that she’s done the “tour ofColombia,” as she calculates having traveled 15,000kilometers, in more than 4,000 hours of service tothe public.In this regard, the differentiating value representedby this mechanism stands outs against otherlisted Colombian companies that have minorityshareholders. “The way in which Ecopetrol assumesits responsibility as an issuer of shares is moreproactive. It shows its commitment to supporting itsZamora and her service colleagues point out thatfor the most part they help employees, retireesor housewives, such as Carmen, who after 15minutes of service got off the bus with the help ofone of her grandchildren and flashed a mischievoussmile, when she knew that by being an Ecopetrolshareholder, the 5 million she invested in 2007, hadbecome 19 million pesos in late 2012.“I think I’ll wait a little more and then enjoy thatmoney, because I don’t want my heirs fighting overit,” remarked Carmen as she said goodbye.

354Responsibilitywith the customerand productsEcopetrol’s commitment to its 347 customers isto ensure their satisfaction through excellence inservice, maximizing the value of the products andservices that are offered to them.

Social dimension355Materiality of customersand productsThe issues of greatest relevance or materialityrelated to the responsibility that the company mustassume in respect of the products it delivers toits customers, have been selected on the basis ofvarious studies conducted in 2011 and 2012, as wellas the opinions and concerns received through thevarious channels established by the company.Thus, this report covers the following issues:Petrochemical and industrial customerscomprise: 174 customers, mostly processorsand, to a lesser extent, marketing intermediaries.They buy solvents, bases, paraffins,polyethylene, asphalt, sulfur and propylene,among others, which constitute raw materialsfor the production of end-customer productssuch as glues, paints, plastics and candles.• Customer segmentation• Customer relationship model- Customer satisfaction- Perfect Deliveries to End Customers• Products- Product catalog- Life cycle of products- Regulation of products on the market- Responsibility in the handling of products- Impacts of products on healthCustomer segmentationCustomers are segmented using a combination ofcriteria, among others, considering the geographicmarket where they are located and the productsthe company sells them.Domestic customersLiquid fuels customers comprise: 78wholesale distributors, consisting of national andmultinational companies, to whom Ecopetrolsells gasoline for different applications such asautomotive, marine, aviation and industrial.Natural gas customers comprise: 55distributors serving the residential, vehicular andindustrial sectors, as well as power generationcompanies.International customersEcopetrol has 40 international customers, whichin their vast majority are refiners that use oil as araw material to turn it into fuel for different uses.To a lesser extent, the trader-type has customers,whose role is commercial intermediation to reachnew customers and markets.The main export product is heavy crude, andalso exported is natural gas, diesel, naphtha, fueloil and asphalt.The destinations for Ecopetrol products inthe international market are Venezuela, theCaribbean, United States, India, China andAfrica.

356The indicator for Perfect Deliveries to End Customersattained a result of 98.35%, which is an improvementof 2.45% compared with the previous year.Customer relationship modelThe customer relationship model is basedon the philosophy of Customer RelationshipManagement (CRM) whose main purposeis to achieve customer loyalty through theirsatisfaction by means of individualized treatment.In this context, each Ecopetrol customerhas account executives that are in charge ofaddressing their requirements and concerns,making them directly responsible for the serviceand relationship with these customers.Additionally, customers have variouscommunication channels, such as the ContactCenter, the customer service mailbox, the websiteand the Citizen Participation Office, throughwhich they can make any type of request orsubmit complaints or claims.Customer satisfactionEcopetrol annually evaluates customer perceptionregarding the quality of products and services it offersin the domestic and international market, using theTop Two Boxes methodology.In 2012, against a target of 89% and an internationalbenchmark such as the Service Quality Index, whichestablishes 78% as service excellence, Ecopetrolobtained a score of 92%, which confirms ourcommitment to this stakeholder.Figure 62 shows the evolution of the customersatisfaction survey’s results in recent years.Figure 62.Customer Satisfaction IndexDuring 2012 various activities were carried out toimprove customer relationships, including:• Customer relationships events, such as:forums, breakfasts and roundtables.• Creation and distribution of the newsletter OurCustomers, Our Partners.• Compliance with service level agreements forresponse to complaints and claims.• Holding of the Third Convention for the salesteam.• Configuration and testing of the new CRM toolwith Cloud Computing technology.1008060402037314486899302001 2002 2003 2004 2005 2006Source: Ecopetrol, Vice Presidency of Supply and Marketing

Social dimension357Perfect Deliveries to End CustomersAnother important indicator for evaluating deliveryexcellence is compliance with Perfect Deliveries toEnd Customers.In 2012 this indicator attained a result of 98.35%,which is an improvement of 2.45% compared withthe previous year.It should be noted that during 2012 a newmethodology was applied for measuring theindicator, which considered criteria of quality,timeliness and amount for each of its components.In 2013, this indicator’s scope of measurementwill be extended to all products delivered by theBarrancabermeja Refinery.9289979295922007 2008 2009 2010 2011 2012

358Testimonialcontract formats that are very wellaligned with regulatory norms andit complies fully with deliveries.When force majeure or restrictionsnecessary for maintenance arise, ituses a very timely communicationprotocol that makes it possible togenerate action plans, which impactas little as possible on the end user.Ecopetrol is critical for us, sincehaving a solid and robust supplieris necessary to provide the service,taking into account that we mustperform with high standards ofquality, compliance and regulation.Sandra GiovannaGómez CastañedaLlanogas General Manager“For 26 years Llanogas has beenthe utilities company that Llaneropeople have trusted for thepermanent and reliable supply ofnatural gas. We have been providingthis service in 25 municipalities andnine towns in the departments ofMeta, Cundinamarca and Guaviare.Moreover, on account ofthe expansion that we haveexperienced in recent years, wehave investments in Gases delCusiana, a company that providesthe service in the department ofCasanare.In the last 10 years we haveincreased gas volume five-fold,not only thanks to the homes weserve, but also the expansion ofvehicle gas. In fact, today within ourconsumption profile 44% is vehiclegas, 39% is residential gas and 17%corresponds to the gas demandedby industry and commerce.We have always said that we’vebeen able to ensure serviceprovision to our 130,000 usersthrough the fluid commercial andcontractual relationship betweenEcopetrol and Llanogas.Ecopetrol is our supplier of naturalgas from the wellhead. This is supplythey provide us with each daythrough processes of nomination,orders and deliveries, always withexcellent continuity, quality andcustomer service. Ecopetrol usesFor the community ofmunicipalities and departmentsthat we serve it is known that thegas arrives to their homes, first,because the region is a producerof this hydrocarbon, and second,because there’s a company likeEcopetrol, which produces it andsupplies it to the Llanogas utilitiescompany.The community greatly appreciatesthe provision of this service,as being more economical andenvironmentally friendly than otherfuels, contributes to improvingquality of life and preservingthe environment. Households inLlanos Orientales have welcomedthe arrival of natural gas via thenetwork to their homes”.

Social dimension359ProductsEcopetrol S.A.’s main products are crudes, naturalgas, petrochemicals and biofuels.Product catalogEcopetrol’s website sets out the catalog ofproducts offered by the company to the domesticand international market. For each of theproducts, the following information is available:description and some of its uses, precautions foruse and handling, technical specifications, saleslogistics and delivery site. See more informationon Ecopetrol’s website: http://www.ecopetrol.com.co/especiales/Catalogo_de_Productos/index.htmlLife cycle of productsThe life cycle stages of each product are differentin accordance with their nature. This sectiondiscusses the two most significant ones: crudesand natural gas.CrudesOil is extracted by drilling a well over the reservoir. If the fluid pressure is sufficient, it willforcethe natural exit of oil through the well, which is connected through a network of pipelinestoprimary treatment, where it is dewatered and stabilized, removing the most volatilecompounds. Subsequently, it is transported to refineries or upgrading plant.During the life of the reservoir, the pressure will drop and it will be necessary to use othertechniques for the extraction of oil. These techniques include extraction by means ofpumps, water injection or the injection of gas, among others.The chemical components are separated and the oil obtained by distillation through arefining process. From this, different products are extracted, including: Propane, butane,gasoline, kerosene, diesel, lubricating oils, asphalt, coke. All these products, of lowsolubility, are obtained in fractionation towers.

360Gas platform in Chuchupa, La Guajira

Social dimension361Natural gasNatural gas is a mixture of light hydrocarbons, consisting primarily of methane, and alsoincludes ethane, propane and other heavier hydrocarbons.Some inert gases such as nitrogen and carbon dioxide may be present, as well as smallamounts of hydrogen sulfide and oxygen. It is obtained through the exploitation ofunderground deposits or reservoirs, where it is located independently or associatedwith oil. Once extracted, it is separated from the crude oil and subjected to a treatmentfor withdrawing hydrocarbons (LPG and natural gasoline) and impurities such as watervapor, solids and corrosive products.Natural gas is lighter than air and unless it is trapped, it will rise and dissipate quickly inthe atmosphere in the event of a leak. The transport of crudes, gas and petrochemicalsis carried out through gas pipelines,multipurpose pipelines and tank trucks.Regulation of products in the marketIn order to reduce the concentration of naturalgas supply in the market, the Ministry of Mines andEnergy, through Decree 2100 of 2011 amended theadministration of royalties from natural gas so thatsuch royalties are commercialized directly on behalfof the National Hydrocarbons Agency (ANH).Towards the end of 2011 Ecopetrol signed amandate agreement with the ANH to act asthe royalty gas marketer on behalf of the ANH,reducing Ecopetrol’s share in the market. Theimplementation of this mandate agreement beganin July 2012.Since 2008 Ecopetrol has established a workingplan for the formalization of the marketing channelfor the various petrochemical and industrialproducts where different types of companies(national and multinational) actively participate. Thechannels are open and any market player may enteror withdraw from that channel to the extent thatthey meet the skills and minimum product purchasevolumes required by Ecopetrol.Additionally, the sale of petrochemical andindustrial products is free and the prices thereof areposted on Ecopetrol’s website.Responsibility in the handling ofproductsIn its efforts to minimize the risks and impactsassociated with the manufacture, use and disposalof products and their effects on humans and theenvironment, Ecopetrol has specific processes andprocedures, it complies with national regulationsand applies best practices from the international oilindustry.Thus, for the handling of liquid fuels, Ecopetrolapplies Standard 321 of the NFPA (National FireProtection Association), which sets standards forthe design of storage tanks and filler pipes amongothers, as well as regulations issued by the Ministryof Mines and Energy of Colombia.Regarding fire protection, the NFPA and theAPI (American Petroleum Institute) standardsare applied, as well as the regulations issued bygovernment authorities for national, regional andlocal oversight.

362For the design, construction and operation of facilities forthe transportation and handling of hydrocarbons the API,ANSI, ASME, NFPA, DOT and Icontec standards are appliedIn the case of petrochemical and industrialproducts, Ecopetrol takes special precautionsbecause they are volatile chemicals that may causeexplosions under certain pressure and temperatureconditions. Therefore, they are stored, handledand disposed of in accordance with the technicalspecifications for each product and according tonational regulations for the handling and disposalof hazardous waste.For the design, construction and operation offacilities for the transportation and handling ofhydrocarbons the API, ANSI, ASME, NFPA, DOTand Icontec standards are applied, as well asregulations issued by the Ministry of Mines andEnergy, Ministry of Environment, Housing andTerritorial Development and other competentauthorities.Deserving special attention and strict supervisionare the valves, connections, tank fittings andaccessories, cisterns and cylinders that are used tostore these products, given the magnitude of theconsequences that can be caused by the realizationof some of the risks inherent to these products.Each of the company’s products is identified with asafety data sheet containing relevant informationsuch as composition, hazard identification, first aidmeasures, measures for fire fighting and control,measures for handling and storage, measuresin the event of product escapes or leakage,explosion controls and personal protection,physical and chemical properties, toxicologicaland ecological information, considerations ondisposal, transportation information and regulatoryinformation, and contact details in the event of anemergency.It is important to note that Ecopetrol facilities andoperations have contingency plans for responding,controlling and mitigating the consequences of thematerialization of the potential risks.Impacts of the products on healthThe various products derived from petroleum: naturalgas, liquid fuels and petrochemicals, can causeimpacts on the health and safety of people if nothandled and used in accordance with strict standards,which is why the company is continuously conductingtraining and delivering outreach activities for users ofall levels.Natural gasIn its natural state, before being subjected toa combustion process, natural gas acts as asuffocating agent and may have adverse healtheffects if its hydrogen sulfide content is higher than70 ppm and that of carbon monoxide higher than50 ppm.Hydrogen sulfide is a colorless, unpleasantsmelling, and highly poisonous gas, which atconcentrations of 70 ppm can cause dizzinessand breathing problems, and at air concentrationsabove 300 ppm, can be lethal.Carbon monoxide is a colorless, odorless, andflammable gas, producing toxic action on the bloodand that at air concentrations above 50 ppm, canbe lethal.In the event of leakage, non-essential personnelmust be evacuated from the area and adequateventilation must be provided (explosion proof), thesource of ignition must be removed or eliminated,the gas supply cut, smoking prohibited, and itmust be ensured that electrical switches are notoperated. Leaks or escapes can be detected withsoap suspension applied to the point. A flame must

Social dimension363never be used to detect leaks.Natural gas is highly flammable, but stable undernormal storage and handling conditions. Excessiveheat, flames and other ignition sources must beavoided.It reacts violently with oxidizing agents suchas tetra bromine, chlorine, nitrogen trifluorideand liquid oxygen, and explodes spontaneouslywhen mixed with chlorine dioxide. Incompletecombustion of natural gas generates carbonmonoxide, which is highly harmful and toxic.In case of fire, the flame must be extinguishedwith CO2, dry chemical or halocarbon gas. Onceinitial fire-fighting in response to a natural gas firehas been completed, the adjacent area should becooled and ignition sources eliminated, as there isrisk of another explosion or reignition if the fire isextinguished without cutting the gas supply.The risks of ingestion are extremely rare. It maycause eye irritation, blurred vision, eye watering,redness and surface turbidity.and possible secondary infection. Exposure to itsvapors, fumes or mists may cause eye irritation.There is sufficient evidence of carcinogenicityin experiments with animals. These substancescontain aromatic products that in turn, havepolycyclic aromatic compounds, some of whichhave been shown to cause skin cancer in humanbeings under poor conditions of hygiene andprolonged and repeated contact.Under no circumstances must fuel be storedin a house, apartment, or in any enclosure. Thefuel evaporates continuously and, in addition togenerating an atmosphere of toxic fumes, can causea fire or explosion. In order to handle these safely,adequate waterproof clothing, safety glasses andgloves must be used.Moreover, breathing engine fuel gases can beharmful and cause several effects includingheadaches, dizziness, unconsciousness or death.Following product-handling instruction ensureszero incidents for those who handle these types ofproducts.Liquid fuels(diesel, gasoline and Jet A-1)Fuel inhalation may cause respiratory irritation,with the main effect being the depression of thecentral nervous system. Among the effects of fuelinhalation are euphoria, headaches, dizziness,drowsiness, even resulting in fatal outcomes.For its part, the ingestion of fuel can causegastrointestinal disturbances and the symptomsinclude nausea, vomiting and diarrhea. Repeatedor prolonged skin contact may result in the lossof natural fats, redness, swelling, itching, cracking

364Table of Contents G3.1 GRI - Global Compact – ISO26000Indicator Description Page1: Strategy and ProfileGlobalCompactPrinciples1.1 Statement from senior management 10 1, 8, 9, 10ISO26000Issues and themesOrganizationalGovernanceChapter6.21.2A description of the major consequences, risksand opportunities10, 11,12,137, 8, 9, 10OrganizationalGovernance6.22: Organizational Profile2.1 Name of the reporting organization 162.2 Brands, products and services32, 33,354, 3552.3 Operational structure of the organization32, 33,36OrganizationalGovernance6.22.4 Location of organization’s headquarters 172.5 Countries where the organization operates 17, 32, 332.6 Nature of ownership and legal form 172.7 Main markets served106, 138,354, 3552.8 Scale of the reporting organization 16, 172.9Main decisions taken during the period coveredby the report2.10 Awards received in the reporting period3: Report Parameters6, 3420, 21,22, 233.1 Reporting period 35, 823.2 Date of most recent previous report 823.3 Reporting cycle 823.4 Contact point 833.5 Process for defining report content3.63.73.8Boundary of the report (countries, regions,divisions, facilities, affiliates, etc.)State any specific limitations on the scope orboundary of the reportBasis for reporting on joint ventures,subsidiaries, outsourced operations, and others82, 235,237828291, 93

GRI Table365Indicator Description PageGlobalCompactPrinciplesISO26000Issues and themesChapter3.9Data measurement techniques and the bases ofcalculations28, 72,733.10Explanation of the effect of any re-statementsof information provided in earlier reports 82Significant changes from previous3.11 reporting periods in the scope, boundary, ormeasurement methods applied in the reportTable identifying the location of the Standard3.12Disclosures in the reportPolicy and current practice with regard to3.13seeking external assurance for the report4: Governance, commitments, and engagement4.1 Governance structure of the organization4.2Function of the Chair of the highest governancebody36, 8236450, 51,8326, 27,2930, 314.3 Board structure 31, 40, 414.4 Participation of shareholders and employees4.54.64.7Linkage between compensation for membersof the highest governance body and theorganization’s performanceProcesses in place for the highest governancebody to ensure conflicts of interest are avoidedProcess for determining the qualificationsand experience of members of the highestgovernance body for guiding the organization'sstrategy on economic, environmental and socialissues32, 33, 35,38, 4645, 471, 2, 3, 4, 5,6, 7, 8, 9, 1053 1041, 42,464.8 Mission and values statements 25, 26 7, 8, 94.94.10Procedures of the highest governance body foroverseeing the organization’s identification andmanagement of economic, environmental, andsocial performanceProcesses for evaluating the highest governancebody’s own performance30, 431046 10Verification 7.5.3OrganizationalGovernanceOrganizationalGovernanceOrganizationalGovernanceOrganizationalGovernanceOrganizationalGovernanceOrganizationalGovernanceOrganizationalGovernanceOrganizationalGovernanceOrganizationalGovernanceOrganizationalGovernance6.26.26.26.26.26.26.26.26.26.24.11Explanation of whether the precautionaryapproach or principle is adopted by theorganization156, 157,1617OrganizationalGovernance6.2

366Indicator Description PageGlobalCompactPrinciplesISO26000Issues and themesChapter4.12Externally developed economic, environmental,and social charters, principles, or otherinitiatives to which the organization subscribesor endorses18, 191, 2, 5, 8,9, 10OrganizationalGovernance6.24.13Memberships in associations and/or national/international advocacy organizations18, 19,299OrganizationalGovernance6.24.14List of stakeholder groups engaged by theorganization66, 68OrganizationalGovernance6.24.15Basis for identification and selection ofstakeholders with whom to engage48, 65OrganizationalGovernance6.24.16 Approaches to stakeholder engagement70, 72,73OrganizationalGovernance6.24.17Key topics and concerns that have been raisedthrough stakeholder engagement70, 76,78, 157,158, 159,279, 303OrganizationalGovernance6.2ECONOMIC-FINANCIAL INDICATORSDMA: Despite the complexities of the environment, the financial results of Ecopetrol S.A. in 2012 mark the second highestrecord in the company’s history.In this period, the company demonstrated its strength and ability to maintain competitive indicators in the industry,supported by increased production, the improvement in international reference prices, the execution of commercialstrategies that made it possible to increase sales, and a robust investment plan.Aspect: ECONOMIC PERFORMANCEEC1Direct economic value generated anddistributed, including revenues, operatingcosts, employee compensation, donationsand other community investments, retainedearnings, and payments to capital providers andgovernments.Financial implications and other risks andEC2 opportunities for the organization’s activitiesdue to climate change.Coverage of the organization’s defined benefitEC3plan obligations.Significant financial assistance received fromEC4government.Aspect: MARKET PRESENCEEC5Range of ratios of standard entry level wage bygender compared to local minimum wage atsignificant locations of operation.82, 84,88, 91, 92,93, 96, 97,100, 101,104, 105,106, 117,138, 211180 7132, 256128244Active participation ofthe communityWealth and incomegeneration6.8.36.8.7Social Investment 6.8.9Mitigation andadaptation to climatechangeWorking conditions andsocial protectionResponsible politicalinvolvementWorking conditions andsocial protectionWealth and incomegeneration6.5.56.4.46.6.46.4.46.8.7

GRI Table367Indicator Description PageEC6EC7Policy, practices, and proportion of spending onlocally-based suppliers at significant locationsof operation.Procedures for local hiring and proportionof senior management hired from the localcommunity at locations of significant operation.Aspect: INDIRECT ECONOMIC IMPACTSEC8EC9Development and impact of infrastructureinvestments and services provided primarily forpublic benefit through commercial, in- kind, orpro bono engagement.Understanding and describing significantindirect economic impacts, including the extentof impacts.335,336, 341GlobalCompactPrinciples6337 6313210, 211ISO26000Issues and themesPromoting socialresponsibility in thevalue chainJob creation and skillsdevelopmentWealth and incomegenerationJob creation and skillsdevelopmentWealth and incomegenerationChapter6.6.66.8.56.8.76.8.56.8.7Economic, social andcultural rights6.3.9Active participation ofthe community6.8.3Education and culture 6.8.4Job creation and skillsdevelopment6.8.5Development andaccess to technology6.8.6Wealth and incomegeneration6.8.7Social investment 6.8.9Economic, social andcultural rights6.3.9Promoting socialresponsibility in the6.6.6value chainRespect for propertyrights6.6.7Access to essentialservices6.7.8Wealth and incomegeneration6.8.7Social investment 6.9.8

368Indicator Description PageGlobalCompactPrinciplesISO26000Issues and themesLABOR PRACTICES AND DECENT WORK PERFORMANCE INDICATORSChapterDMA: Within its corporate policy and its Strategic Framework 2011-2020, Ecopetrol, aware that its operation must be inharmony with its various stakeholders and, in particular with the people who work in the company’s various operationaland support areas, has included an explicit guiding principal on human talent management, aimed at generating value forthe organization through labor practices that contribute to both the professional and personal advancement of its workers,contributing to the sustainable development of the company.Aspect: EMPLOYMENTLA1Total workforce by employment type,employment contract, and region.239 6Employment and labourrelations6.4.3LA2Total number and rate of new employee hiresand employee turnover by age group, gender,and region.239, 241,2426Employment and labourrelations6.4.3LA3LA15Benefits provided to full-time employees thatare not provided to temporary or part- timeemployees, by significant locations of operation.Return to work and retention rates afterparental leave, by genderAspect: LABOR/MANAGEMENT RELATIONSLA4LA5Percentage of employees covered by collectivebargaining agreements.Minimum notice period(s) regarding operationalchanges, including whether it is specified incollective agreements.Aspect: OCCUPATIONAL HEALTH AND SAFETY256255263 3263 3Employment and labourrelations6.4.3Return to work andretention rates afterparental leave, by6.4.4gender.Labour practices 6.4Working conditions andsocial protection6.4.4Fundamental principlesand rights at workEmployment and labourrelationsWorking conditions andsocial protection6.3.106.4.36.4.4Social dialogue 6.4.5Employment and labourrelations6.4.3Working conditions andsocial protection6.4.4Social dialogue 6.4.5LA6Percentage of total workforce represented informal joint management–worker health andsafety committees that help monitor and adviseon occupational health and safety programs.266Occupational health andsafety6.4.6

GRI Table369Indicator Description PageLA7LA8Rates of injury, occupational diseases, lost days,and absenteeism, and total number of workrelatedfatalities, by region.Education, training, counseling, prevention,and risk-control programs in place toassist workforce members, their families,or community members regarding seriousdiseases.Health and safety topics covered in formalLA9agreements with trade unions.Aspect: TRAINING AND EDUCATIONLA10LA11LA12Average hours of training per year per employeeby gender, and by employee category.Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging their career.Percentage of employees receiving regularperformance and career development reviewsAspect: DIVERSITY AND EQUAL OPPORTUNITYLA13Composition of governance bodies andbreakdown of employees per employeecategory according to gender, age group,minority group membership, and otherindicators of diversity.Aspect: EQUAL REMUNERATION FOR WOMEN AND MENLA14Ratio of basic salary and remuneration ofwomen to men by employee category.266,269, 270,271266, 274266 3249250252GlobalCompactPrinciples40, 41 1, 6245 1, 6ISO26000Issues and themesOccupational health andsafetyChapter6.4.6Occupational health andsafety6.4.6Health and safety topicscovered in Formalagreements with trade6.8.3unions.Education and culture 6.8.4Health 6.8.8Occupational health andsafety6.4.6Human developmentand training in theworkplaceHuman developmentand training in theworkplacePercentage ofemployees receivingregular performanceand career developmentreviews.Human developmentand training in theworkplaceDiscrimination andvulnerable groupsFundamental principlesand rights at workEmployment and laborrelationsDiscrimination andvulnerable groupsFundamental principlesand rights at workEmployment and laborrelations6.4.76.4.76.8.56.4.76.3.76.3.106.4.36.3.76.3.106.4.3Working conditions andsocial protection6.4.4

370Indicator Description PageGlobalCompactPrinciplesHUMAN RIGHTS PERFORMANCE INDICATORSISO26000Issues and themesChapterDMA: In 2009 Ecopetrol, made the decision to take a holistic approach to human rights through the approval of a Guide onHuman Rights and adherence to United Nations Global Compact (Global Compact).In order to ensure the commitments contained in the Guide and the Global Compact principles, Ecopetrol has createdplatforms and tools for management, such as the Human Rights Committee, the Tactical Plan on HR and an indicator ofcompliance with this plan.Aspect: INVESTMENT AND PROCUREMENT PRACTICESDue diligence 6.3.3HR1Percentage and total number of significantinvestment agreements and contracts thatinclude clauses incorporating human rightsconcerns, or that have undergone human rightsscreening.282 1, 2Avoidance of complicity 6.3.5Promoting socialresponsibility in thevalue chain6.6.6Due diligence 6.3.3Avoidance of complicity 6.3.5HR2Percentage of significant suppliers andcontractors that have undergone human rightsscreening, and actions taken.282 1, 2Employment and labourrelationsPromoting socialresponsibility in thevalue chain6.4.36.6.6HR3Total hours of employee training on policies andprocedures concerning aspects of human rightsthat are relevant to operations, including thepercentage of employees trained.282,283,284,296, 2971, 2 Avoidance of complicity 6.3.5Aspect: NON-DISCRIMINATIONAvoidance of complicity 6.3.5Resolution of complaints 6.3.6HR4Total number of incidents of discrimination andcorrective actions taken.281, 291 1, 2, 6Discrimination andvulnerable groups6.3.7Fundamental principlesand rights at work6.3.10Employment and laborrelations6.4.3

GRI Table371Indicator Description PageAspect: FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAININGHR5Aspect: CHILD LABORHR6Operations identified in which the right toexercise freedom of association and collectivebargaining may be at significant risk, andactions taken to support these rightsOperations identified as having significant risksfor incidents of child labor, and measures takento contribute to the elimination of child laborAspect: FORCED AND COMPULSORY LABORHR7Operations identified as having significant riskfor incidents of forced or compulsory labor, andmeasures to contribute to its eliminationAspect: SECURITY PRACTICESHR8Percentage of security personnel trainedin the organization’s policies or proceduresconcerning aspects of human rights that arerelevant to operations.Aspect: INDIGENOUS RIGHTS263,294, 295GlobalCompactPrinciples1, 2, 3292 1, 2, 5293 1, 2, 4282,283, 2841, 2ISO26000Issues and themesChapterDue diligence 6.3.3Risk situations forhuman rights6.3.4Avoidance of complicity 6.3.5Civil and political rights 6.3.8Fundamental principlesand rights at work6.3.10Employment and laborrelations6.4.3Social dialogue 6.4.5Due diligence 6.3.3Risk situations forhuman rights6.3.4Avoidance of complicity 6.3.5Discrimination andvulnerable groups6.3.7Fundamental principlesand rights at work6.3.10Due diligence 6.3.3Risk situations forhuman rights6.3.4Avoidance of complicity 6.3.5Discrimination andvulnerable groups6.3.7Fundamental principlesand rights at work6.3.10Avoidance of complicity 6.3.5Employment and labour6.4.3relationsPromoting socialresponsibility in the6.6.6value chainResolution of complaints 6.3.6HR9Total number of incidents of violations involvingrights of indigenous people and actions taken285, 287 1, 2Discrimination andvulnerable groups6.3.7Civil and political rights 6.3.8Respect for property rights 6.6.7

372Indicator Description PageAspect: ASSESSMENTHR10Percentage and total number of operations thathave been subject to human rights reviews and/or impact assessmentsGlobalCompactPrinciples280 1, 2ISO26000Issues and themesChapterHuman rights 6.3Due diligence 6.3.3Risk situations forhuman rights6.3.4Avoidance of complicity 6.3.5Aspect: REMEDIATIONHuman rights 6.3HR11Number of grievances related to human rightsfiled, addressed and resolved through formalgrievance mechanisms280, 281 1, 2Resolution of complaints 6.3.6SOCIETY PERFORMANCE INDICATORSDMA: In order to comply with its commitments, Ecopetrol has created a social management model through which thecompany aims to influence the generation of favorable conditions for development in the territories where it is present, basedon the effective management of the impacts caused by its activities and the social risks that may affect operations.Aspect: COMMUNITYEconomic, social and6.3.9261, 291,cultural rightsNature, scope and effectiveness of programs and 304,Job creation and skills6.8.5practices that assess and manage the impacts 305,developmentSO1of operations on communities, including the 306,Wealth and income6.8.7company’s entry, operation and exit308, 311,generation315Respect for property6.6.7rightsEconomic, social and6.3.9cultural rightsPollution prevention 6.5.3SO9Operations with significant potential or actualnegative impacts on local communities304, 328Protection of theenvironment,biodiversity andrestoration of naturalhabitatsActive communityparticipation anddevelopment6.5.66.8.

GRI Table373Indicator Description PageGlobalCompactPrinciplesISO26000Issues and themesChapterEconomic, social andcultural rightsPollution preventionSO10Prevention and mitigation measuresimplemented in operations with significantpotential or actual negative impacts on localcommunities304,320, 3221Protection of theenvironment,biodiversity andrestoration of naturalhabitatsActive communityparticipation anddevelopmentAspect: CORRUPTIONSO2Percentage and total number of business unitsanalyzed for risks related to corruption.54, 59,13310 Anticorruption 6.6.3SO3Percentage of employees trained inorganization’s anti-corruption policies andprocedures.56 10 Anticorruption 6.6.3SO4Actions taken in response to incidents ofcorruption.58, 60,6110 Anticorruption 6.6.3Aspect: PUBLIC POLICYSO5SO6Public policy positions and participation inpublic policy development and lobbying.Total value of financial and in-kind contributionsto political parties, politicians, and relatedinstitutions by country.Aspect: ANTI-COMPETITIVE BEHAVIORSO7Aspects: COMPLIANCESO8Total number of legal actions for anticompetitivebehavior, anti-trust, and monopolypractices and their outcomes.Monetary value of significant fines and totalnumber of non-monetary sanctions for noncompliancewith laws and regulations.62, 63,10317, 33062, 63 10137127, 135Responsible politicalinvolvementTotal value offinancial and in-kindContributions asto political parties,politicians, and relatedInstitutions by country.Responsible politicalinvolvementActive participation ofthe community6.6.46.6.46.6.46.6.4Fair competition 6.6.5Respect for propertyrights6.6.7Respect for propertyrightsWealth and incomegeneration6.6.76.8.7

374Indicator Description PageGlobalCompactPrinciplesPRODUCT RESPONSIBILITY PERFORMANCE INDICATORSISO26000Issues and themesChapterDMA: Ecopetrol participates in all stages of the hydrocarbon chain from the exploration and production of oil and gas,through to their processing into higher value-added products and subsequently their marketing in domestic and internationalmarkets.Each of the steps undertaken in this area involve risks and opportunities for both the company and the areas where theactivities are carried out, as well as for the country, which thanks to the presence of Ecopetrol is able to undertake new socialinitiatives aimed at improving the standard of living of Colombians.Aspect: CUSTOMER HEALTH AND SAFETYEconomic, social and82, 84,6.3.9culturalPR1PR2Life cycle stages in which health and safetyimpacts of products and services are assessedfor improvement, and percentage of significantproducts and services categories subject tosuch proceduresTotal number of incidents of non-compliancewith regulations and voluntary codesconcerning health and safety impacts ofproducts and services during their life cycle, bytype of outcomesAspect: PRODUCT AND SERVICE LABELING88, 92,93, 96,97, 100,101, 104,105, 107,138, 359,3621135 1Promoting socialresponsibility in thevalue chainProtection of consumerhealth and safetySustainableconsumptionEconomic, social andculturalPromoting socialresponsibility in thevalue chainProtection of consumerhealth and safetySustainableconsumptionFair marketing practices,factual and unbiasedinformation, and faircontracting practices6.6.66.7.46.7.56.3.96.6.66.7.46.7.56.7.3PR3Type of product and service informationrequired by procedures, and percentage ofsignificant products and services subject tosuch information requirements361, 362Protection of consumerhealth and safetySustainableconsumptionCustomer service,support and resolutionof complaints anddisputes6.7.46.7.56.7.6Education andawareness6.7.9

GRI Table375Indicator Description PageGlobalCompactPrinciplesISO26000Issues and themesChapterFair marketing practices,factual and unbiasedinformation, and faircontracting practices6.7.3Protection of consumerhealth and safety6.7.4PR4Total number of incidents of non-compliancewith regulations and voluntary codesconcerning product and service information andlabeling, by type of outcomes135SustainableconsumptionCustomer service,support and resolutionof complaints anddisputes6.7.56.7.6Education andawareness6.7.9Protection of consumerhealth and safety6.7.4Sustainableconsumption6.7.5PR5Practices related to customer satisfaction,including results of surveys measuringcustomer satisfaction354, 355,356Customer service,support and resolutionof complaints anddisputes6.7.6Access to essentialservices6.7.8Education andawareness6.7.9Aspect: MARKETING COMMUNICATIONSFair marketing practices,factual and unbiasedinformation, and faircontracting practices6.7.3PR6Programs for adherence to laws, standards,and voluntary codes related to marketingcommunications, including advertising,promotion, and sponsorship49, 62,354,355, 36110Customer service,support and resolutionof complaints anddisputes6.7.6Education andawareness6.7.9

376Indicator Description PageGlobalCompactPrinciplesISO26000Issues and themesChapterFair marketing practices,factual and unbiasedinformation, and faircontracting practices6.7.3PR7Total number of incidents of non-compliancewith regulations and voluntary codesconcerning marketing communications,including advertising, promotion, andsponsorship by type of outcomes62Customer service,support and resolutionof complaints anddisputes6.7.6Education andawareness6.7.9Aspect: CUSTOMER PRIVACYPR8Total number of substantiated complaintsregarding breaches of customer privacy andlosses of customer data137 1Protection and privacyof consumer data6.7.7Aspect: COMPLIANCEPR9Monetary value of significant fines fornon- compliance with laws and regulationsconcerning the provision and use of theorganization’s products and services135Customer service,support and resolutionof complaints anddisputes6.7.6ENVIRONMENTAL PERFORMANCE INDICATORSDMA: Aware that its operation must be in harmony and in balance with its stakeholders and the environment, Ecopetrolincludes environmental management within its Corporate Policy and Strategic Framework 2011-2020 as an explicit guidingprinciple for generating value to the organization through processes and products that, thanks to a minimal environmentalimpact, contribute to the sustainable development of the company, the areas where it operates and the country as a whole.Aspect: MATERIALSPollution prevention 6.5.3189, 190,EN1 Materials used by weight or volume8, 9 Sustainable use of1916.5.4resourcesPercentage of materials used that are recycled 189, 190,Sustainable use ofEN28, 96.5.4input materials191resourcesAspect: ENERGYPollution prevention 6.5.3EN3Direct energy consumption by primary energysource171, 172 8, 9EN4 Indirect energy consumption by primary source 171, 172 8, 9Sustainable use ofresources6.5.4Mitigation andadaptation to climate 6.5.5changePollution prevention 6.5.3Sustainable use ofresources6.5.4

GRI Table377Indicator Description PageEN5EN6EN7Aspect: WATEREnergy saved due to conservation and efficiencyimprovementsInitiatives to provide energy-efficientor renewable energy-based productsand services, and reductions in energyrequirements as a result of these initiativesInitiatives to reduce indirect energyconsumption and reductions achievedGlobalCompactPrinciples171, 172 8, 9171, 172 8, 9171, 172 8, 9ISO26000Issues and themesChapterPollution prevention 6.5.3Sustainable use ofresources6.5.4Pollution prevention 6.5.3Sustainable use ofresources6.5.4Pollution prevention 6.5.3Sustainable use ofresources6.5.4EN8 Total water withdrawal by source 212 8, 9Sustainable use ofresources6.5.4EN9Water sources significantly affected bywithdrawal of water.212 8, 9Sustainable use ofresources6.5.4EN10Percentage and total volume of water recycledand reused.212 8, 9Pollution prevention 6.5.3Sustainable use ofresources6.5.4Aspect: BIODIVERSITYDescription of land adjacent to or withinprotected natural areas or unprotected areas ofEN11 high biodiversity. Indicate the location and sizeof land owned, leased, or managed, which is ofhigh biodiversity value outside protected areasDescription of the most significant impactson biodiversity in protected natural areasor in unprotected areas of high biodiversity,EN12arising from activities, products and services inprotected areas and in areas of high biodiversityvalue in areas outside protected areas218, 219 8218, 219 8EN13 Habitats protected or restored 218, 219 8EN14Strategies, current actions, and future plans formanaging impacts on biodiversity.218, 219 8Protection of theenvironment,biodiversity andrestoration of naturalhabitatsProtection of theenvironment,biodiversity andrestoration of naturalhabitatsProtection of theenvironment,biodiversity andrestoration of naturalhabitats6.5.66.5.6Pollution prevention 6.5.3Protection of theenvironment,biodiversity andrestoration of naturalhabitats6.5.6

378Indicator Description PageEN15Number of IUCN Red List species and nationalconservation list species with habitats in areasaffected by operations, by level of extinction riskAspect: EMISSIONS, EFFLUENTS AND WASTEEN16EN17EN18EN19Total direct and indirect greenhouse gasemissions by weightOther relevant indirect greenhouse gasemissions by weightInitiatives to reduce greenhouse gas emissionsand reductions achievedEmissions of ozone-depleting substances byweight.218, 219,222,223,226, 228180, 184,186, 187180, 184,186, 187180, 184,186, 187180, 184,186, 187GlobalCompactPrinciples87, 87, 87, 8ISO26000Issues and themesProtection of theenvironment,biodiversity andrestoration of naturalhabitatsChapter6.5.6Mitigation andadaptation to climate 6.5.5changeMitigation andadaptation to climate 6.5.5changePollution prevention 6.5.3Emissions of ozonedepletingsubstances by 6.5.5weight.7, 8 Pollution prevention 6.5.3EN20NO, SO, and other significant air emissions bytype and weight.180, 184,186, 1877, 8 Pollution prevention 6.5.3EN21 Total water discharge by quality and destination. 217 7, 8 Pollution prevention 6.5.3EN22Total weight of waste by type and disposalmethod.194, 195 7, 8 Pollution prevention 6.5.3EN23 Total number and volume of significant spills. 207 7 Pollution prevention 6.5.3Weight of transported, imported, exported, orEN24treated waste deemed hazardous under the194, 195,terms of the Basel Convention Annex I, II, III,198and VIII, and percentage of transported waste7 Pollution prevention 6.5.3shipped internationally.EN25Identity, size, protected status, and biodiversityvalue of water bodies and related habitatssignificantly affected by the reportingorganization’s discharges of water and runoff.Aspect: PRODUCTS AND SERVICESEN26Initiatives to mitigate environmental impactsof products and services, and extent of impactmitigation213 8, 9174, 192 7, 8, 9Sustainable use ofresourcesProtection of theenvironment, biodiversityand restoration ofnatural habitats6.5.46.5.6Pollution prevention 6.5.3Sustainable use ofresources6.5.4Promoting socialresponsibility in the6.6.6value chainSustainableconsumption6.7.5

GRI Table379Indicator Description PageEN27Percentage of products sold and their packagingmaterials that are reclaimed by category194, 195GlobalCompactPrinciplesISO26000Issues and themesChapterPollution prevention 6.5.3Sustainable use ofresourcesSustainableconsumptionAspect: COMPLIANCEMonetary value of significant fines and totalEN28number of non-monetary sanctions for noncompliancewith environmental laws and137 Pollution prevention 6.5.3regulationsAspect: TRANSPORTPollution prevention 6.5.3EN29Significant environmental impacts oftransporting products and other goods andmaterials used for the organization’s operations,and transporting members of the workforce96, 97,207, 210Sustainable use ofresourcesMitigation andadaptation to climatechangePromoting socialresponsibility in thevalue chain6.5.46.7.56.5.46.5.56.6.6Aspect: OVERALLEN30Total environmental protection expendituresand investments by type166, 167 7, 8, 9Pollution prevention 6.5.3Mitigation andadaptation to climate 6.5.5change

380Indicator Description PageOG1OG2OG3Volume and type of estimated proved reservesand production.Total amount invested in renewable energyResearch and Development.Total amount of renewable energy generated bysource.GlobalCompactPrinciplesOil&Gas (OG) Supplement Indicators91, 92,93166, 167,1741749ISO26000Issues and themesChapterOG4OG5OG6Number and percentage of significant operatingsites in which biodiversity risk has been assessedand monitored and where action plans are inplaceVolume of formation or produced waterVolume of flared and vented hydrocarbon as partof primary operations218, 219 8212, 213,215, 220180, 185OG7 Amount of drilling waste (drill mud and cuttings) 194OG8 Benzene, lead and sulfur content in refined fuels 182 9OG9Operations in locations with presence ofindigenous communities or in areas adjacentto or affected by the activities, and percentageof these locations that are covered by specificparticipation strategies285,286, 2871OG10OG11OG12Number and description of significant disputeswith local communities and indigenous peoplesNumber of sites that have been decommissionedand sites that are in the process of beingdecommissionedList, quantify and describe involuntaryresettlement cases necessary for the company’sactivities287 1174, 200,201, 202,203261OG13Number of process safety events, by businessactivity204, 207,210, 211OG14Volume of biofuels produced, purchased andsold174

GRI Table381

382Falta documento original en inglés

GRI Table383Falta documento original en inglés