Evan Block & Drew Potts AAPL Code of Ethics Section 1 It shall - PowerPoint PPT Presentation

Evan Block & Drew Potts

AAPL Code of Ethics  Section 1  It shall be the duty of the Land Professional at all times to promote and, in a fair and honest manner, represent the industry to the public at large with the view of establishing and maintaining goodwill between the industry and the public and among industry parties.  The Land Professional, in his dealings with landowners, industry parties, and others outside his industry, shall conduct himself in a manner consistent with fairness and honesty, such as to maintain the respect of the public.

AAPL Code of Ethics  Section 2  Competition among those engaged in the mineral and energy industries shall be kept at a high level with careful adherence to established rules of honesty and courtesy.  A Land Professional shall not betray his partner’s, employer’s, or client’s trust by directly turning confidential information to personal gain.

AAPL Code of Ethics  Section 2 (Cont.)  The Land Professional shall exercise the utmost good faith and loyalty to his employer (or client) and shall not act adversely or engage in any enterprise in conflict with the interest of his employer (or client). Further, he shall act in good faith in his dealings with the industry associates.  The Land Professional shall represent others only in his areas of expertise and shall not represent himself to be skilled in professional areas in which he is not professionally qualified.

The Rules in Action  Although the Code of Ethics only contains two (2) rules, it covers a broad range of topics and situations.  The Standards of Practice contain fifteen (15) provisions and expand upon the Code of Ethics.  In order to illustrate some possible real-world scenarios, today’s presentation will follow the (fictional) story of Landman extraordinaire, Ron Swanson.

A little about Ron...  Ronald Ulysses Swanson is an avid fan of bacon, woodworking, and whiskey.  He is an ordinary man with an extraordinary mustache.  He has two ex-wives, both named Tammy, which he avoids at all costs.

A little about Ron...  After an extended and lackluster career in public service, Ron has decided to become a Landman.  Ron, having never asked for directions or help in his life, has determined to forego any education related to his new profession. Ron has never read the Code of Ethics or the Standards of Practice for Landmen.  Relying solely on his wit and charm, Ron talks his way into a land position by promising his new boss a year’s supply of steaks and scotch.

Ethical Violations?  Based solely on the preceding facts, has Ron committed any ethical violations?  Bribery?  Failure to become educated in profession?  AAPL Standard of Practice 1

AAPL Standards of Practice  Standard 1 In justice to those who place their interests in his care, a land professional shall be informed regarding laws, proposed legislation, governmental regulations, public policies, and current market conditions in his area of represented expertise, in order to be in a position to advise his employer or client properly.

What Ron Did Wrong  Bribery  “Negotiating” his way into a land position with steaks and scotch is questionable, but not inherently a violation of the Code of Ethics.  Failure to Become Educated  Ron has clearly violated Standard of Practice 1, as he has made no attempt to familiarize himself with the laws, regulations, and standards applicable to his new profession as a Landman.

More about Ron...  Ron’s new employer, Pawnee Resources, assigns Ron to a prospect, and instructs him to broker leases with four (4) unleased mineral owners: John Maple, Trey Hugger, Leslie Pope, and Ann Derkins.  Ron wants to appear professional, and decides to have business cards made. He has noticed many of his co- workers’ business cards include “CPL” or “RPL” after their name. Ron has no idea what this means, but assumes he should include it on his own business cards.  Ron has business cards made that read as follows: Pawnee Resources Ronald U. Swanson, CPL/RPL/RL Experienced Landman

Ethical Violations?  Based solely on the preceding facts, has Ron committed any ethical violations?  Use of CPL and/or RPL?  “Experienced Landman”?  AAPL Standards of Practice 13 & 14

AAPL Standards of Practice  Standard 13 The land professional shall at all times present an accurate representation in his advertising and disclosures to the public.

AAPL Standards of Practice  Standard 14 The land professional shall not aid or abet the unauthorized use of the title “Certified Professional Landman (CPL),” “Registered Professional Landman (RPL),” “Registered Landman (RL), “ P.Land ” (Canadian designation) and “CPL/ESA . ”

What Ron Did Wrong  CPL/RPL  Ron is neither a CPL nor a RPL. His use of either of these titles is strictly prohibited by Standard of Practice 14.  “Experienced Landman”  Ron has yet to finish his first day as a Landman. He is by definition inexperienced. Including “experienced” on his business card is not an accurate representation, and violates Standard of Practice 13.

More about Ron...  Ron travels to his assigned prospect, and stops at the home of John and Sarah Maple, ranchers who recently moved from Canada to Texas in search of warmer weather. The Maple Ranch is within the prospect and unleased.  Upon meeting the Maples, Ron discovers they are originally from Canada. Ron, for no apparent reason, dislikes Canadians and Canadian Bacon, and believes both should be prohibited within the United States.  Ron informs John and Sarah that he does not have the authority to execute a lease with “foreigners,” and promptly leaves without obtaining a lease.  The Maples are outraged by Ron’s refusal to lease their land, and contact their local news station. The story is broadcast on the nightly news, and prompts Michael Moore to produce his latest documentary, “Crude & Prejudice,” in which the energy industry is negatively portrayed.

Ethical Violations?  Based solely on the preceding facts, has Ron committed any ethical violations?  Refusal to Lease?  AAPL Standards of Practice 2, 3 & 5

AAPL Standards of Practice  Standard 5 The land professional shall not deny equal professional services to any person for reasons of race, creed, sex or country of national origin. The land professional shall not be a party to any plan or agreement to discriminate against a person or persons on the basis of race, creed, sex or country of national origin.

AAPL Standards of Practice  Standard 2 It is the duty of the land professional to protect the members of the public with whom he deals against fraud, misrepresentation, and unethical practices. He shall eliminate any practices which could be damaging to the public or bring discredit to the petroleum, mining or environmental industries.

AAPL Standards of Practice  Standard 3 In accepting employment, the land professional pledges himself to protect and promote the interests of his employer or client. This obligation of absolute fidelity to the employer’s or client’s interest is primary but it does not relieve the land professional of his obligation to treat fairly all parties to any transaction, or act in an ethical manner.

What Ron Did Wrong  Refusal to Lease  Ron has denied John and Sarah the opportunity to lease their land because of his disapproval of their country of origin, a direct violation of Standard of Practice 5.  Ron failed to protect the interests of his employer, Pawnee Resources, by refusing to take a lease on the Maple’s land, thereby violating Standard of Practice 3.  Furthermore, Ron’s actions have served to discredit the energy industry, a violation of Standard of Practice 2.

More about Ron...  Incredibly, Ron only receives a reprimand from Pawnee Resources, and is allowed to continue his leasing efforts.  Ron visits Trey Hugger, another unleased mineral owner within the prospect. Trey is interested in leasing his land, but expresses fear that drilling operations will diminish the land’s natural beauty and tranquility.

More about Ron...  Ron is determined to take a lease, and quickly informs Mr. Hugger that he has a “background in geology” and can tell that Mr. Hugger’s land is unlikely to be a drillsite. Ron genuinely believes his statements are correct, but his only “background” in geology is his collection of pyrite.

Ethical Violations?  Based solely on the preceding facts, has Ron committed any ethical violations?  “Background in geology”?  AAPL Standard of Practice 6

AAPL Standards of Practice  Standard 6 A land professional shall provide a level of competent service in keeping with the standards of practice in those fields in which a land professional customarily engages. The land professional shall not represent himself to be skilled in nor shall he engage in professional areas in which he is not qualified such as the practice of law, geology, engineering or other disciplines.