OUR COMPLIANCE PROCESSES
We operationalize our compliance culture through a variety of processes and operating rhythms described below:
1. Compliance Helpline Leaders
To promote an atmosphere where our employees feel free to raise concerns without fear of retaliation, we have established a global organization of Compliance Helpline Leaders who are responsible for receiving concerns and ensuring that all concerns are properly investigated and addressed. In addition, employees are all trained that they can also raise their concerns with any manager, or with the Human Resources or Legal organizations. The number and type of concerns raised to the Compliance Helpline Leaders are measured and tracked, and are periodically discussed at several regional Compliance Review Boards established by the Company.
2. Compliance Review
For several years, SABIC business has conducted a Compliance Review process that is designed to engage our employees to assess compliance processes, prioritize key risks and develop mitigation plans to address those risks. The process includes a Bottoms Up Review during which each exempt Manager must meet with his/her direct reports and cover the following:
- a review of each policy in the Code of Ethics;
- a review of Bottoms Up output from prior reviews;
- a general discussion encouraging employees to freely surface compliance concerns without fear of retaliation.
Each compliance concern that is raised is recorded by the Manager and addressed either during, or within a reasonable time after, the Bottoms Up Review is over.
In 2008 and 2009, the participation rate of the relevant population in the Bottoms Up reviews was over 90 percent The results of the Bottoms Up review are then discussed by management which develops a summary of the issues raised and any other existing and emerging risks that could adversely impact the organization. This process results in the development of risk mitigation or action plans for the highest priority risks. These plans include assigning the responsibility for mitigation actions to particular individuals, with required dates for completion. The progress towards completion of the plans is tracked on a monthly basis, through a digitized system tracker and is also discussed at the periodic meetings of the Compliance Review Boards (see below).
In 2011, SABIC initiated a global Code of Ethics review for senior-level employees. The new process consists of a Bottoms Up Review of the Code of Ethics in manager-led discussions, with over 2500 employees participating. As with the previous process, the results of these reviews are discussed by management and risk mitigation plans are developed and tracked for the highest priority risks.
In 2012, SABIC will institute a global bottoms-up compliance review program as well as a global review for all enterprise risks.
3. Compliance Review Boards
Oversight of SABIC’s compliance program is performed by a network of regional Compliance Review Boards. These Boards meet periodically to identify any new significant compliance concerns, review the activities of the Compliance Helpline Leaders, and monitor the completion of the integrity training required of our employees.
4. Compliance Training
One way that we try to ensure compliance with our Code of Ethics is to require all employees to be trained on the specific requirements of the Code. In an effort to better equip employees to recognize and respond to increasingly complex compliance challenges, our company’s Legal team developed a comprehensive web-based compliance training program. This program reviews each policy in detail, and includes questions that must be answered correctly to show understanding of the requirements. Currently, our company requires that all employees take four General Awareness courses on the basics of all of the policies. In addition, there are another 31 advanced courses that are more detailed and are assigned to employees based on their roles within the company. This approach allows employees to complete training with particular focus on those compliance policies and practices that pertain most directly to the issues they face in performing their job duties. Our employees are required to take an average of about 15 advanced courses during a two year training cycle. Several of our compliance courses are available in the languages most commonly used by our employees. In 2010, the rate for the completion of required training in SABIC was 97 percent for General Awareness courses, and 90 percent for advanced courses. For 2011, the respective completion rates were both over 98 Percent.
Another feature of our compliance training program is the executive level training delivered by our company’s senior leadership, with the support of the Legal team. This training is designed to train senior management on the compliance responsibilities of a leader, emerging compliance risks, how to conduct compliance investigations and a review of our compliance infrastructure. In 2008, 98 percent of the executive staff participated in this program. During 2010, the executive level training was rolled out to SABIC businesses outside of the SABIC business, and was given to 95 percent of the target audience. Additional Leadership training will be conducted periodically.
In addition to Code of Ethics specific training, we also conduct live training on high-risk areas (e.g. EHSS, International Trade and Antitrust). For example, we track required training in EHSS, and the completion rate for 2008 was 99.8 percent, 2009 was 93.86 percent, and 2010 was 99.39 percent; the training completion rate for training on International Trade Sanctions was 95 percent of the relevant population. In 2010 the training was rolled to SABIC businesses outside of SABIC and targeted global audiences were trained in Anti-dumping, International Trade, EHSS Compliance, Antitrust and Intellectual Property. In 2011, over 3500 employees were trained in these risk areas.
5. Supplier Qualification Process And Contracts
We have implemented a program to help ensure that our suppliers adhere to ethical standards and comply to the fundamentals of our Code of Ethics and EHSS policies, including: fair employment practices, no underage or forced labor, reasonable hours of work and wages, no discrimination, freedom of association and EHSS matters such as providing a safe work environment, pollution prevention, waste minimization and recycling, and safe and secure transportation of materials. We perform EHSS due diligence on all direct material suppliers at varied levels dependent on each suppliers’ risk potential. For all suppliers, we undertake inquiries that range from questionnaires, to interviews, to thorough on-site EHSS inspections. We have performed reviews of over 2700 suppliers in over 50 countries, including over 700 on-site inspections. On-site EHSS inspections have been performed for over 80 percent of SABIC’s annual direct material buy for manufacturers located in emerging countries. In addition, our standard forms of contract contain multiple provisions designed to ensure our suppliers meet our integrity standards and EHSS expectations.
For our additional supply chain disclosures:
6. Digital Tools and Periodic Compliance Messaging
Several digital tools enhance the robustness of our compliance program. Our watch list screening system screens orders to ensure we comply with all applicable government sanctions and trade restrictions and that we are doing business only with reputable entities. In addition, our leadership team has been committed to engage our employees through frequent communications on compliance responsibilities. Compliance is consistently made an agenda item at staff meetings.