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2002 ChevronTexaco Corporate Responsibility Report Economic IssuesSupplier Diversity & Small Business DevelopmentContributing to Local Economic DevelopmentTo conduct our operations, we purchase a wide variety of goods andservices from external contractors and suppliers. In 2002, ChevronTexacospent approximately US$18 to $20 billion globally on such goodsand services.We strive to ensure our supplier base is reflective of our customers,host communities and the markets we serve. We also believe sourcingfrom diverse, small and locally owned companies makes significantcontributions to local economic and human capacity development,and these efforts are part of our commitment to be a valuable memberof the communities we operate in. Therefore, as much as possible andpractical, ChevronTexaco seeks to contract with small, locally ownedbusinesses and, in the United States, also from minority- and womenownedbusinesses.Supporting Supplier Diversity in the United StatesIn the United States, ChevronTexaco’s Small Business/Supplier DiversityProgram works to provide opportunities, contracts and outreach assistanceto small and minority- and women-owned businesses. The program haswon numerous awards, includinginduction into the Women’sU.S. Small Business/SupplierDiversity Expenditure*Millions of $U.S.Business Enterprise National1,400Council’s “Elite 8” in 2003. We1,200are committed to monitoring andreporting our progress toward1,000achieving our small business/800supplier diversity goals, and we600work to continually improve our400performance in this area.200Reflecting our commitment to0U.S. supplier diversity, over the last97 98 99 00 01 02Small businesssix years, we have spent approximatelyUS$8.6 billion with smallWomen-owned business enterpriseMinority-owned business enterprisewomen- and minority-owned*1997–2001 data are combinedChevron and Texaco. 2002 data business enterprises. In 2002,are ChevronTexaco.we met our goal of spending25 percent of total goods and services spend with small businesses,spending more than US$1.3 billion with small business suppliers in theUnited States. We spent approximately US$212 million with womenownedsuppliers and nearly US$209 million with minority-ownedsuppliers, although we fell short of our 5 percent contracting goal foreach of those groups, reaching just under 4 percent for each.Helping Build Local Economies WorldwideIn addition to our efforts in the United States, we have “local content”programs to source from small, locally owned businesses in the communitieswe operate in around theworld. These programs are managedat the business unit level.In addition to buying goods andservices from local suppliers,many ChevronTexaco businessunits offer business planning,skills training and technologytransfer programs, and they providefinancing – includingGibson Ola, manager of local businessdevelopment for ChevronTexaco’sNigeria operation, says the company’smicro-loans – to help supplierrole in support of local content iscompanies develop and expand.aligned with the goals of the country.We believe our local contentefforts are among the most significant and sustainable ways we cancontribute to the economic and social development of our hostcommunities.Highlights of recent local content efforts include:> Nigeria: Since 1999, Chevron Nigeria Ltd. (CNL) and the NigerianNational Petroleum Corporation have had a formal local content developmentpolicy promoting the use of qualified indigenous contractorsand suppliers. CNL has a dedicated Local Content Development Unitto identify and support local supplier companies, including organizingLocal Content fairs to increase awareness and create opportunities forNigerian companies. In 1997, some 25 percent of company contractsfor goods and materials were with Nigerian firms. By 2002, that figurehad grown substantially, to 90 percent of contracts, representing 35 percentof CNL’s total spending for materials and services going to Nigerianindigenous and joint-venture companies.> Angola: ChevronTexaco’s subsidiary, Cabinda Gulf Oil Co. Ltd., hashad dramatic success developing local Angolan businesses. The companyhas created a team dedicated to local business development,which includes supporting start-up businesses in everything fromclothing manufacture to fish meal processing. In 2002, the companyspent more than US$230 million with local suppliers, exceeding itslocal content goal by more than 275 percent. In total, 268 Angolanownedbusinesses supplied materials and services to ChevronTexaco’sAngola affiliate in 2002.© 2003 ChevronTexaco Corporation. All Rights Reserved.33