Due diligence policies and procedures in place

Conducting business in compliance with applicable laws is among PGNiG’s top priorities. Therefore, there are transparent internal regulations in place at the Company, which provide guidance for the conduct of PGNiG Group companies and their employees and associates. The Group’s priorities are delivered through adherence to the Ethics and Compliance Management System in place at the PGNiG Group, which addresses and regulates key issues in the area, applying in particular to:

• remits of the respective bodies responsible for managing ethics and compliance at the PGNiG Group;
• the manner of coordination and exchange of information on any breaches of applicable laws, customary market norms, industry standards, good market practice, or standards of ethical conduct at the PGNiG Group;
• responsibilities of the PGNiG Group companies in the management of ethics and compliance risks.

Observance of human rights at the PGNiG Group is underpinned by the Code of Ethics (the PGNiG Group Ethical Standards Code), which has been implemented in order to harmonise and consolidate the ethical standards applied across the PGNiG Group. The core values, which are among the key rules of conduct set forth in the Code, are as follows:

• responsibility – the foundation for all employees in their day-to-day work, regardless of the position held, and at the same time a challenge which motivates them to work for the common good and take care of the natural environment,
• credibility – building a high-quality and dialogue-based culture of communication, inspiring the atmosphere of trust among all stakeholders of the Group, in a lasting and consistent manner,
• partnership – building lasting and mutually beneficial relations based on trust, both within the PGNiG Group with its employees and trade unions, as well as outside the Group with its customers, local communities and other market participants,
• quality – ensuring top quality of the Group’s products and services, driven by the principle of continuous improvement through implementation of state-of-the-art technologies, streamlining of management processes, and building an ethical workplace across the PGNiG Group, as desired by our customers, employees and all business partners.

These values at the PGNiG Group serve as a compass in its activities and relations with local communities. They are treated as an overriding mission pursued for the benefit of the Polish society. The fundamental golden rules, which can be expressed with clear and simple messages such as ‘do good, avoid evil’ or ‘treat others the way you want to be treated’, are the foundation for building other important standards of conduct.

The provisions of the Code of Ethics are supported by the Transparency Policy for Managers, which introduces a higher standard of organisational culture, in particular in terms of preventing conflicts of interest among members of governing bodies and top management in Group companies, thereby protecting the legitimate interest of the PGNiG Group. The document:

• defines a conflict of interest and methods of preventing situations which could lead to potential or actual conflicts of interest;
• sets forth the disclosure requirements towards the company and the rules of conduct towards family members and other close persons;
• determines sanctions for breaches of the Policy;
• protect PGNiG’s interests in a proper manner.

Respect for employee diversity and employee rights is also an element of the PGNiG Group’s anti-mobbing and anti-discrimination policy. The Group takes measures conducive to building positive relations between the employees and the workplace, making every employee feel duly respected. The Group opposes any form of discrimination, mobbing, persecution or harassment, including any harassment of sexual nature. Provisions of the Policy are incorporated in the Work Rules of individual companies and in the PGNiG
Group’s Ethics and Compliance Management System. The implemented provisions of the Policy:

• define any unwanted behaviours which may take place both at the workplace and during business trips, employee travel and in any other locations where employees perform their work-related duties;
• specify the measures to be taken to prevent mobbing, discrimination and sexual harassment, and describe the consequences of breaching the applicable regulations or creating conditions conducive to such breaches;
• provide information on the actions taken to promote desired attitudes, to disseminate knowledge on mobbing, discrimination and harassment, and to monitor the practical application of anti-mobbing procedures;
• indicate employee duties which are meant to ensure compliance with adopted standards, to avoid unwanted behaviour, and to react and intervene in situations where observed behaviour violates accepted social standards;
• specify the procedures for reporting any suspected mobbing, discrimination or harassment, as well as the rules of proceedings conducted by the Commission.

The PGNiG Group operates in compliance with applicable anti-corruption laws. In this respect, the organisation is also guided by supranational regulations, such as the OECD Convention on Combating Bribery of Foreign Public Officials In International Business Transactions of 1999 and the US Foreign Corrupt Practices Act (FCPA).

Every employee, irrespective of the position held, is required to comply with the applicable local, national and international laws, taking due account of the anti-corruption regulations adopted by the PGNiG Group in its Anti-Corruption and Gift Policy and Code of Ethics.

The regulations set out in the PGNiG Group’s Anti-Corruption and Gift Policy:

• define the obligations of PGNiG S.A. and other Group companies, as well as of their respective employees and contractors, with regard to preventing corrupt practices, and provide the employees and contractors with information and guidelines on how to identify corrupt practices and what to do in the event that such practices are identified;
• provide guidance on accepting and offering gifts, presents or invitations to entertainment events, as a supplement to the relevant provisions of the Code of Ethics; the Policy provides specific guidance regarding participation in entertainment events and on accepting and offering gifts in the course of procurement proceedings;
• define corruptive practices and specify prohibited action which can entail the risk of criminal liability; furthermore, pursuant to the Criminal Code, the Policy sets forth the minimum and maximum sanctions imposed on employees for accepting, soliciting, providing or promising anything of value (including any financial and personal gain);
• set forth the rules applying to procurement procedures, which should allow to track the sources of information concerning the subject matter of the procurement contract, identify the persons responsible for defining the terms and conditions for participation in the procurement procedure, including the evaluation criteria and form of contract, and to define the duties of members of the contract award committee and their personal responsibility; the Policy presents recommendations on how to communicate with bidders in keeping with the principle of equal access to information for all parties;
• provide a number of recommendations on how to monitor compliance with the Policy and take preventive measures to mitigate the risk of occurrence of corruptive practices or conflicts of interest.