Our anti-corruption and ethics efforts

Preem is a global importer and exporter of raw materials and products. We therefore highly prioritize maintaining stable and proper business relationships with our suppliers and customers. 

Active ethics and anti-corruption efforts are among the basic requirements for maintaining sustainable business relationships. Without these efforts, there would be a risk of bribery or the formation of cartels, which in turn could undermine the industry. Corruption in a business also raises the risk of detrimental effects on people and the environment.

Preem actively pursues efforts to prevent corruption in its operations. We also attempt to reach out in our supply chains. The foundations for these efforts are laid in our Business Ethics Policy and Code of Conduct. The Business Ethics Policy contains business principles in line with good business ethics, such as healthy competition, proper marketing, and the avoidance of conflicts of interest. The Code of Conduct denounces all forms of corruption, bribery, fraud and restrictive trade practices in breach of competition legislation.

Ethics Committee reviews policies

Our Ethics Committee plays a key role in Preem’s ethics and anti-corruption governance and controls. The Ethics Committee is a forum that reviews the ethics policies of the company and their compliance. Key personnel of Preem are members of the committee, such as the CEO and other members of Senior Management along with employee representatives from the trade unions. The committee meets twice a year or when necessary.

Ethics and anti-corruption efforts during the year

In 2017, we developed a new framework for internal controls on Preem’s financial reporting. The framework requires that key controls be tested and reported to Senior Management and the Audit Committee on an annual basis. As part of our internal control of irregularities, we also conduct recurring fraud analyses of supplier invoices and related records to prevent and discover cases of fraudulent activity.

Code of Conduct for employees and suppliers

Preem’s employees and suppliers are expected to adhere to our Code of Conduct. In 2016 and 2017, we worked on collecting our suppliers in one system where they confirmed that they have read the Code of Conduct or had an equivalent code of conduct approved by us. These efforts are ongoing, and we aim to bring all suppliers into the system in 2018.

We will also create a new internal training program in 2018 that is focused on Preem’s Code of Conduct and Sustainability Framework. The purpose is to raise awareness of the Code of Conduct among all employees.

Preem also invested in training initiatives in 2017 to bolster our internal ethics and anti-corruption competency. One example is an e-course we conducted on bribes and permitted gifts. The course is mandatory for all managers and employees who come in contact with external parties in their work.

The percentage of relevant employees who took the e-course “Bribes or permitted gifts – what are the rules?” was 74.6 in 2017. The percentage was 97.4 in 2016, and the goal for 2017 was 100 percent. The reasons for the completion rate being low were a high workload, and a change to a new IT system for courses. 

Whistleblower function for severe breaches

In addition to Preem's advanced reporting systems for corruption and breaches, we continuously employ an internal whistleblower function, which has been in place for more than 10 years. The whistleblower system enables secure and anonymous reporting of suspected severe breaches of both laws and internal company rules. Reports are received by the head of internal audit and are reported on to the Preem Audit Committee, which decides on whether and how an investigation is to be conducted.

Outlook

Preem’s ethics and anti-corruption efforts are subject to an inherent challenge: the lack of traceability in the fossil supply chain. As opposed to the renewable supply chain, where traceability is a statutory requirement, the fossil supply chain is not subject to any international legislation on traceability. This makes controls on the fossil supply chain harder – read more here. We would like to see greater traceability requirements in the fossil supply chain. However, international collaboration, international standardization and statutory requirements are needed to make this possible.

In addition to the activities Preem conducted in 2017, we have identified a series of development opportunities for ethics and anti-corruption. These include plans to appoint a compliance and business ethics officer in 2018. This officer will be responsible for compliance with the business ethics guidelines, and ensuring we are up-to-date and following up activities in this area. We also plan to provide employee training in competition law in 2018 with a focus on cartel activities.