Harvest Energy believes in maintaining good corporate governance practices and understands that our reputation for honesty and integrity is critical to the success of our business. To that end, we require that our board of directors, officers and employees exhibit the highest standards of professional and ethical conduct.

Harvest complies with corporate governance guidelines established by the Canadian Securities Administrators under National Instrument 58-101, details of which are included in our 2009 Proxy Statement and Information Circular filed on SEDAR, EDGAR and posted on the Harvest website. It should be noted that Harvest does not have an internal auditor. Aside from this difference, Harvest’s current corporate governance practices do not materially differ from those outlined by the Securities & Exchange Commission (“SEC”) or the New York Stock Exchange (“NYSE”).

Although we currently fully comply with the existing corporate governance guidelines for Canadian issuers, we remain committed to further enhancing our corporate governance practices as needed. This includes ensuring that the responsibilities outlined in the mandates for the Board and its committees will meet or exceed changes to corporate governance guidelines which may occur in the future. Harvest has a whistleblower policy which allows members of the organization to anonymously report known violations of the code of ethics.

Every employee at Harvest must read and sign our Corporate Code of Business Conduct and Ethics. This Code is a statement of principles to which Harvest is committed and which is designed to direct all employees, officers and directors of Harvest in determining ethical business conduct. It also reflects our commitment to a culture of honesty, integrity and accountability and outlines the basic principles and policies with which all employees are expected to comply.

Harvest's Code of Conduct & Ethics

Stewardship:

The Board of Directors of Harvest has taken overall responsibility for the stewardship of the corporate planning process, risk management policies and programs, management development and succession planning, significant business development (including large acquisitions and major financing proposals such as the issuance of trust units or debt structuring), and the integrity of internal control and information systems.

Three specific Board committees have been established to ensure maximum efficiency and effectiveness: the Audit Committee, the Corporate Governance and Compensation Committee, and the Reserves, Safety and Environment Committee. Each committee includes directors who possess the relevant skills and knowledge needed to execute the committee’s mandate.

Audit Committee

The Audit Committee is a committee of the board of directors ("the Board") of Harvest Operations Corp. ("HOC") to which the Board has delegated its responsibility for oversight of the nature and scope of the annual audit, management’s reporting on internal accounting standards and practices, financial information and accounting systems and procedures, financial reporting and recommending, for approval of the Board, the audited year-end financial statements, interim financial statements and other mandatory disclosure releases containing financial information. Audit Committee members are William (Bill) Robertson, Richard Harris, and Dennis Balderston. Each member is "financially literate" as defined under Multilateral Instrument 52-110 for Canadian reporting guidelines. Mr. Robertson also possesses financial management expertise as interpreted and required by Harvest’s Board of Directors pursuant to the audit committee corporate governance requirements outlined by the NYSE.

The primary objectives of the Committee are as follows:

• Assisting directors to meet their responsibilities (especially for accountability) in respect of the preparation and disclosure of the financial statements of Harvest and other financial information;
• Providing better communication between directors and external auditors;
• Enhancing the external auditor’s independence;
• Increasing the credibility and objectivity of financial reports; and
• Strengthening the role of the outside directors by facilitating in depth discussions between directors on the Committee, management and external auditors.

Compensation / Corporate Governance Committee

The Compensation / Corporate Governance Committee is comprised of Dr. Seong-Hoon Kim (Chairman of this committee), Hong-Geun Im, Chang-Koo Kang and William Friley. Harvest recognizes the importance of sound corporate governance and our corporate structure and governance principles have been designed to ensure that stakeholders interests are addressed while maintaining structural simplicity, transparency, and aligned interests. We are committed to conducting all of our affairs based on a foundation of trust, integrity and ethical behavior. As stewards of the Trust, the Board of Directors and senior executive team are capable and empowered to ensure that the interests of all stakeholders are appropriately balanced with the strategies and principles of the Trust. The purpose of the Compensation / Corporate Governance committee includes:

• Proposing new board nominees and assessing directors;
• Implementing a process for assessing the effectiveness of the Board of Directors, its committees and individual directors;
• Providing orientation and education programs for new directors; and
• Reviewing the size, skill set and number of Board of Directors to ensure optimal Board effectiveness.
• Reviewing the compensation philosophy and remuneration policy for employees of Harvest and recommending changes to the Board to improve Harvest's ability to recruit, retain and motivate employees;
• Reviewing and recommending to the Board the retainer and fees to be paid to members of the Board;
• Reviewing and recommending to the Board performance objectives and the compensation package for the President;
• Recommending to the Board, with assistance from the President, the compensation and benefits package for other senior management positions;
• Determining and recommending, for approval of the Board, bonuses to be paid to officers and employees of Harvest and to establish targets or criteria for the payment of such bonuses, if appropriate; and
• Preparing and submitting a report of the Committee for inclusion in annual disclosure required by applicable securities laws to be made by Harvest including the Compensation Committee Report required to be included in the information circular – proxy statement of Harvest.

Reserves, Safety & Environment Committee

The Reserves, Safety and Environment Committee is comprised of Richard Harris, William Friley and John Zahary. The purpose of this Committee includes:

• Reviewing annual independent engineering evaluation reports on our oil and natural gas reserves;
• Periodically reviewing the qualifications, experience and independence of the consulting engineering firms reporting on our oil and natural gas reserves;
• Meeting with the independent reserve evaluators employed or otherwise retained by the Trust who prepare such reports.
• Assisting directors in meeting their responsibilities (especially for accountability) in respect of Harvest's legal, industry and community obligations pertaining to the areas of health, safety and environment.
• Assisting directors in meeting their responsibilities in respect of the Corporation's obligation to establish appropriate environment, health and safety policies and procedures and maintaining management systems to implement such policies and monitor compliance.

Board Composition

Harvest Energy Trust’s Board of Directors is comprised of eight members, all of whom are “outside directors” under the terms of the Toronto Stock Exchange (“TSX”) guidelines relating to corporate governance matters. This is more fully outlined in our Information Circular and Proxy Statement for our most recent annual meeting of unitholders.

Dr. Seong-Hoon Kim, Chairman⁽³⁾  

 

Dennis Balderston⁽¹⁾

Mr. Balderston is a Chartered Accountant and was formerly an audit partner at Ernst & Young in Calgary. During his career as an audit partner he was responsible for a portfolio of public clients, the majority in the oil and gas sector. Mr. Balderston retired from Ernst & Young in 2005. From 2005 to now he has served on a number of public entity Boards and is currently a Board member of Ember Resources Inc. and Suroco Energy Inc. Mr. Balderston graduated with a Bachelor of Commerce degree from the University of Saskatchewan.

William Friley⁽²⁾⁽³⁾

Mr. Friley is a native Albertan who has been involved in the oil and gas industry for the past 30 years.  Mr. Friley is the former President and CEO of Triumph Energy Corporation which he led until its sale in 2001.  He is currently President and CEO of Telluride Oil and Gas Ltd., President of Skyeland Oils Ltd., a Director of Mustang Resources Ltd., and Chairman of TimberRock Resources.  Mr. Friley graduated from the University of Colorado with a degree in Geology and has explored for oil and gas throughout western Canada with both public and private companies.

Richard Harris⁽¹⁾⁽²⁾

Since 1985, Richard Harris has been in independant oil and gas consultant in Calgary. Previously, he was the President of four Canadian public oil and gas companies and has served on the boards of nine other oil and gas service cHe was a member of the Alberta Securities Commission's Oil and Gas Securities Taskforce that led to the completion of Nationa Instrument 51-101, and he served on the Commission's Reserve Advisory Committee unitl his retirment from the Committee in 2005.

Mr. Harris has presented papers at numerous seminars and conferences on regulatory and technical matters and has served as outside consultant to a Canadian oil and gas company's reserves audit committee.

He is a member of several industry societies and holds the designations of Professional Geologist in Canada and Certified Petroleum Geologist and Certified Professional Geological Scientist in the United States.

A dual U.S. and Canadian citizen, Mr. Harris is a graduate of the University of Texas with B.Sc. and M.A. degree in Geology

Hong-Geun Im⁽³⁾

Mr. Im is a geologist and holds a BS in geology from Korea University. Mr. Im is currently Director and Executive Vice President for New Ventures & Exploration of Korea National Oil Corporation (KNOC) which is the ultimate parent company of Harvest Energy. Mr. Im has been with KNOC since 1982 and has held positions for the exploration and development of oil and gas assets in both Korea and foreign countries. Immediately prior to his promotion to his current position, Mr. Im was the General Manager of the KNOC Calgary office. In 2000, Mr. Im received a Presidential Award from the President of the Republic of Korea for his achievement in the successful exploration of a offshore gas field in Korea.

Chang-Koo Kang⁽³⁾

Mr. Kang is a Corporate Financial Specialist, and holds a Boachelor's degree in accounting from Pusan National University. He has held the position of Finance Team Senior Manager at Korea National Oil Corporation, 100% owned by the Korean Government since February 1, 2005. He held financing for the merger and acquisition of PetroTech Peruana S.A., Peru, Harvest Energy, and Sumble JSC, Kazakhstan while in office. He is currently Vice President of Finance Management Department, KNOC. Mr. Kang graduated with an MBA from Sogang Business School, Sogang University, Korea. 

William D. Robertson⁽¹⁾

Mr. Robertson is a Fellow Chartered Accountant and was formerly the lead oil and gas specialist at Price Waterhouse and PriceWaterhouseCoopers in Calgary. After enjoying a 36-year career with the firm, Mr. Robertson retired from practice in 2002. Prior to this, he served on the CIM Petroleum Society Standing Committee on Reserve Definitions, the Financial Advisory Committee of the Alberta Securities Commission, the working sub committee of the Alberta Securities Commission on Oil and Gas Reporting and the Council of the Institute of Chartered Accountants of Alberta. Mr. Robertson graduated with a Bachelor of Commerce degree from the University of Alberta.

John Zahary⁽²⁾

John Zahary, a Professional Engineer with extensive senior management experience in the oil and natural gas industry, is Harvest's President & Chief Executive Officer. Prior to the merger of Harvest and Viking Energy Royalty Trust in February 2006, Mr. Zahary had been President & CEO of Viking since April 2004.

Prior thereto, he was President of Petrovera Resources, a 46,000 boe/d oil and natural gas producer with assets in Saskatchewan and Alberta. Previously, Mr. Zahary held senior positions at PanCanadian Petroleum Limited, Canadian Oil Sands Trust, Gulf Canada Resources Ltd., Imperial Oil Limited and Texaco Canada Resources. Mr. Zahary is the Chairman of the Petroleum Technology Research Centre, Governor of the Canadian Association of Petroleum Producers, a past president of the Alberta Chamber of Resources, and Chairman of the Alberta Rhodes Scholarship Selection Committee. Mr. Zahary holds a B.Sc. in Mechanical Engineering from the University of Calgary and a M.Phil. in Management from the University of Oxford.

1. Member of the Audit Committee
2. Member of the Reserves, Safety & Environment Committee
3. Member of the Compensation / Corporate Governance Committee