06.03.2014 angloamerican business integrity policy and its application within the business globally,...

ACTING WITH INTEGRITY

Business Integrity Experience in Anglo American

OBJECTIVES AGENDA An Introduction to Anglo American as Company

Anglo American’s Values

Anglo American’s stance on corruption and anti-bribery policy

The impacts and consequences of corruption

The definition of bribery

Anglo American’s exposure to bribery risk

Recognising and dealing with bribery risk

The Individual’s roles and responsibilities – Business Integrity Training

Speak up – our anti-corruption hotline

ANGLO AMERICAN AN INTRODUCTION

ANGLO AMERICAN AT A GLANCE Anglo American is one of the top 5 diversified global mining

companies

Global Headquarters: London

Stock Exchange Listings: London and Johannesburg

Employees plus contractors: ~ 150,000

Gross revenue in 2013: US$33.0 billion

Operating Profit 2013: US$6.6 billion

A GLOBAL PLAYER

Platinum

Diamonds

Copper

Nickel

Iron Ore and Manganese

Thermal Coal

Corporate offices

Key

Headquarters

Metallurgical Coal

Other Mining and Industrial

Headquartered in London with 95 mines and advanced projects worldwide

ANGLO AMERICAN - CORE COMMODITIES

• Platinum: Global leader with 40% of global production

• Diamonds: Be Beers is the Global leader with 35-40% of global

rough diamond production by value

Snap Lake Diamond Mine Northern Canada


• Metallurgical and Thermal coal: 3rd largest coking coal exporter

globally


• Iron ore and Manganese: 4th largest producer globally


• Copper: 8th largest producer globally


• Nickel: 8th largest producer globally


• Niobium: 2nd largest producer globally


• Phosphates: Producer of Fertilisers in Brazil


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THE CONTEXT OF BUSINESS INTEGRITY

Safety and

Sustainable

Development

Employment and

Labour Rights Community

Development and

Human Rights

Business

Integrity

Good Citizenship Business Principles

“Zero tolerance and implacable opposition to corruption”.

The Anglo

American

Safety Way

The Anglo

American Social

Way

The Anglo

American

Environmental Way

Business

Integrity

Policy

Policies

“We will neither give nor accept bribes nor permit others to do so in our name. We

aim to operate to the same level of integrity wherever we work.”

Anglo Values

“This means taking an honest, fair, transparent and ethical approach in everything

that we do. It’s not about being popular; it’s about always doing the right thing.”

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THE IMPACTS OF CORRUPTION

“Corruption is an insidious plague that has a wide range of

corrosive effects on societies. It undermines democracy and the

rule of law, leads to violations of human rights, distorts markets,

erodes the quality of life and allows organised crime, terrorism and

other threats to human security.

Corruption hurts the poor disproportionately by diverting funds

intended for development, undermining the government’s ability to

provide basic services, feeding inequality and injustice, and

discouraging foreign investment and aid.”

Kofi Annan, Former Secretary-General of the United Nations.

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BAD FOR BUSINESS

Social instability

Cost of doing

business increased

Corruption begets

ever more corruption

– the slippery slope

Unlevel playing field/

Loss of business to

competitors

Uncertainty

Prosecution

Bureaucracy

encouraged

Investment

discouraged

Blackmail

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UK BRIBERY ACT 2010

Came into force 1 July 2011

Gold standard in anti-bribery legislation

New corporate, strict liability offence: failing to prevent bribery (unlimited fines)

Extraterritoriality: Prosecution regardless of where bribery takes place

Sole defence: “Adequate Procedures” (bribery prevention measures) including anti-corruption training & due diligence

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ACTING WITHOUT INTEGRITY - CONSEQUENCES FOR COMPANIES

Criminal fines

Civil fines

Legal fees

Invalid contracts & licences

Monitoring & compliance costs

Debarment/Exclusion

Reputational damage

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DEFINING BRIBERY

Promising, offering or giving a benefit to another

person (or entity), whether directly or through an

intermediary, to influence that person (or another

person), to act in breach of their business or

public duties.

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DEFINING BRIBERY

“Promising, offering or giving…”

Includes authorising,

cooperating, covering up,

turning a blind eye, soliciting

accepting.

“…a benefit to influence…”

Anything of value: Cash, gifts,

entertainment, offers of employment,

charitable contributions, bursaries,

memberships, allowing use of

company assets

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FORMS A BRIBE CAN TAKE

Bribes

Cash

Gifts

Hospitality

Use of company

assets

Offer of employment

Information Political donation

Charitable donation

Sponsorship

Social investment

Membership

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DEFINING BRIBERY

“Promising, offering or giving…”

Includes authorising,

cooperating, covering up,

turning a blind eye, soliciting

accepting.

“…a benefit to influence…”

Anything of value: Cash, gifts,

entertainment, offers of employment,

charitable contributions, bursaries,

memberships, allowing use of

company assets

“…whether directly or through an

intermediary…”

Anglo American is responsible for the

actions of those that work on its behalf

“… to act in breach of public or

business duties …”

Providing an improper

advantage to the recipient: a

contract, a licence, planning

permissions, customs

clearance, insider information

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DEFINING EXTORTION

Extortion is the crime of obtaining money or

some other thing of value by the abuse of one's

office or authority.

Extortion, involves the verbal or written threat that something will

happen to the victim if he or she does not comply with the

extortionist's will.

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A COMPANY’S RISK EXPOSURE TO CORRUPTION

• Sales

• Exports

• Licences

• Utilities

• Customs

• Lobbying

• Purchases

• Imports

• Project Approvals

Community Leaders Suppliers

Customers Public

Officials

Use of

Agents

Social

Spend

Gifts &

Hospitality

Use of

Agents

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MEASURING CORRUPTION

9.0 – 10

8.0 – 8.9

7.0 – 7.9

6.0 – 6.9

5.0 – 5.9

4.0 – 4.9

3.0 – 3.9

2.0 – 2.9

1.0 – 1.9

0.0 – 0.9

No data

VERY CLEAN

HIGHLY CORRUPT

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ANGLO AMERICAN GLOBAL FOOTPRINT

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TI CORRUPTION PERCEPTIONS INDEX 2013

VERY CLEAN HIGHLY CORRUPT

HOW DO WE EMBED BUSINESS

INTEGRITY INTO THE WIDER COMPANY

1) BY HAVING A BUSINESS INTEGRITY POLICY

AND PERFORMANCE STANDARDS

2) BY TRAINING ALL STAFF TO RECOGNISE

AND ADDRESS CONFLICTS OF INTEREST

AND CORRUPT BEHAVIOURS

3) BY ENCOURAGING OUR STAKEHOLDERS TO BE

INVOLVED IN BUSINESS INTEGRITY ISSUES

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BUSINESS INTEGRITY PERFORMANCE STANDARDS

A: Gifts, Entertainment and Hospitality

B: Conflicts of Interest

C: Facilitation Payments

D: Use of Company Assets

E: Political Donations

F: Interactions with Government Officials

G: Charitable Donations

H: Social and Community Investment and Enterprise Development

I: Sponsorship

J: Retention and Payment of Intermediaries

K: Mergers, Acquisitions, Joint Ventures and Associates

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(A) GIFTS AND HOSPITALITY – KEY PRINCIPLES

Written disclosure and approval required for all gifts, entertainment and hospitality exceeding your function’s reporting threshold.

You are accountable for determining the acceptability of gift and hospitality exchange regardless of the threshold.

Key considerations for acceptability include: business purpose, timing, proportionality, reciprocity, counterpart permissions.

Be extra careful when dealing with government/public officials (including employees of state-owned entities)

Could the perception be created that objectivity is compromised?

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1) Is my course of action consistent with Anglo American’s values,

principles and business integrity policy?

2) Am I setting a good example?

3) Am I being transparent?

4) Have I sought appropriate advice?

5) Would my actions cause embarrassment to the company or myself

if they were to become public knowledge (remember, even if your

actions are not strictly illegal they could be damaging to Anglo

American’s reputation)?

SELF-CHECK QUESTIONS

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1) What factors give rise for concern from a business integrity perspective?

2) What action should you consider taking and why?

a) Keep the gift;

b) Share the gift with your team;

c) Return the gift to the potential supplier;

d) Raffle the gift off for charity.

3) Would your decision be different if:

a) The gift was just one bottle of wine; or

b) The gift was from an existing supplier?

AN UNEXPECTED GIFT (A, B)

You are due to award a procurement contract before 20th December. You

have a meeting with one of the potential bidders on 10th December. The

next day you receive a case of expensive champagne with the note,

“Thank you for our meeting. We would look forward to working with you.

Merry Christmas.”

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1) What factors give rise for concern from a business integrity perspective?

2) On what basis could you agree to facilitate the trip for the official?

A REQUEST FROM A GOVERNMENT OFFICIAL (A, F)

You are in discussions with a government official over the results of an

environmental impact report commissioned as part of the permitting

process required for a project in Mongolia. During the meeting he says that

he has heard relatively positive comments about Anglo American

operations but he is still concerned about the environmental impacts of

mining. He then asks if he and three of his colleagues could visit some of

Anglo American’s operations and talk to the local communities, perhaps in

South Africa?

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(B) CONFLICTS OF INTEREST – KEY PRINCIPLES

Transparency through disclosure of conflicts of interest are fundamental to maintaining a reputation for professional integrity.

Conflicts of interest can arise in various situations include outside jobs and activities, relationships and investments.

All actual, potential or perceived conflicts of interest should be avoided or promptly disclosed or managed.

The disclosure and management of conflicts on interest should be fully documented.

Certain “interests” are prohibited and others require prior approval. Ensure that you are clear on the Business Integrity Policy requirements.

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REQUIREMENTS OF PERFORMANCE STANDARD B

Prohibited Prior Written Approval Disclosure as potential, actual or

perceived conflict arises

Outside Jobs and

Directorships

- An employee must never perform services for anyone or any organisation that they deal with as part of their job for Anglo American. - Employees must never engage in outside jobs or directorships that compromise an employee’s ability to devote their principle energies to Anglo American.

- Required for outside employment, directorships , running for public office or similar activities.

- Required if you are considering assuming an outside directorship position; and additional job, or providing services to a third party.

Activities and

Affiliations of

employees or their

close

friends/relatives

- Political donations of all types (including working time) are prohibited. - Activities that compromise an employee’s ability to devote their principle energies to Anglo American are prohibited.

- Required for employees that wish to utilise company time or other company assets to support any outside activities or affiliations (e.g. Charities).

- Required if you, your close friend or relative works for a charity or other organisation that Anglo American currently provides or is looking to provide support to (financial or otherwise). - Required if you, your close friend or relative is affiliated to an NGO or other type of group that impacts Anglo American.

Relationships of

employees or their

close

friends/relatives

with third parties or

each other

- An employee should not be in a position where they are able to hire, supervise, affect terms and conditions or employment or influence the management of any close relative. - Close friends or relatives of Anglo American employees should not have business dealings with the employees or anyone reporting to them.

- Required if your close friend or relative performs services for a customer, supplier, competitor or other stakeholder. - Required if you, a close friend or relative has, commences or is considering commencing, a close personal relationship with your manager, somebody that reports to you or with the employee of an actual or potential customer, supplier or competitor or other relevant stakeholder.

Investments held by

employees or their

close

friends/relatives

- Personal investment decisions must not be made on the basis of material, non-public information acquired through an employee’s work for Anglo American. - An employee, their close friend or relative, must never invest (directly*) in a customer ,supplier, or other entity that Anglo American contracts with if the employee, or anyone that they supervise, is responsible for, and has any involvement, with the selection or assessment of, negotiations or general dealings with the supplier, customer or entity.

- Required for any (direct*) material investment (any economic interest that might influence or be perceived to influence your judgement) in a competitor, customer, supplier or other entity that Anglo American contracts with.

- Required if you, a close friend or relative, have a direct* material investment in a customer, supplier or other entity that Anglo American is seeking to contract with.

*DIRECT INVESTMENTS: Performance Standard B only relates to investments which are held directly. Investments which are indirectly held via pension schemes or mutual funds, for example, where the employee has no discretion or influence over the investment decisions made, are not relevant.

Gifts and

entertainment

-Various exclusions apply. See performance Standard A of the Business Integrity Policy and any department, function or Business Unit specific Gifts and Hospitality that may apply.

Gifts and entertainment that exceed the threshold established by the Business Unit or corporate function.

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(E) POLITICAL DONATIONS (INCLUDING ACTIVITIES AND

CONTRIBUTIONS BY EMPLOYEES)

Anglo American will not make political donations, whether in cash or kind, anywhere in the world. If you receive a request for a political donation immediately notify you Business Integrity Champion and the Business Integrity Department.

If you participate in a personal capacity in a political process, it is your responsibility to make clear in doing so that: - You do not represent Anglo American; - Your views and actions are your own; and - Any financial or other contributions are given personally.

If you are intending to run for public office, prior approval is required (from the person designated (by your head of Department) as this constitutes a potential conflict on interest.

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HELP AND SUPPORT

When I have a Business

Integrity dilemma

If I am unable to obtain an

answer or want to discuss

and issue with someone

outside of my department

If I know or reasonably

suspect a Business Integrity

issue

Consult with:

Business Integrity Champion

Business Integrity Compliance Department

Refer to/consult with:

Self-Check Questions

Quick Reference Guide

Business Integrity Manual

Line Manager/Nominated Contact

Report to:

Your Line Manager

Your Head of Department

Business Integrity Champion

Business Integrity Compliance Department

Speakup

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REPORTING A BUSINES INTEGRITY ISSUE ANONYMOUSLY

Speakup VISIT: www.anglospeakup.com

EMAIL: [email protected]

PHONE: +27 31 571 5408

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NOTICE IN OUR LOCAL OFFICE

OBJECTIVES CONCLUDING REMARKS Anglo American’s stance on corruption is clear and uncompromising and embedded in

our corporate values

The impacts and consequences of corruption are severe

We define bribery and extortion and address our response to it

Anglo American has analysed its exposure to corruption and undertakes regular risk

assessments

We train staff how to recognise and deal with bribery and corruption risks

Each staff member is trained in their individual roles and responsibilities

Business integrity coaches are available to help

Anti-corruption hotlines are available to the general public to report issues to

Anglo American management

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OUR INTEGRITY POLICY DOCUMENT

THANK YOU

ANY QUESTIONS?