NETCARE LIMITED CORPORATE GOVERNANCE POLICY POLICY NUMBER COR12 PREPARED BY APPROVED BY CORPORATE GOVERNANCE CORPORATE GOVERNANCE PREPARATION DATE JUNE 2014 ISSUE DATE FEBRUARY 2017 REVISION DATE FEBRUARY 2019 VERSION 1.1 (2017)
COPYRIGHT WARNING NOTICE This policy and procedure is the property of Netcare Limited. Copyright subsists in this work. Any unauthorised reproduction, publication or translation of the work are acts of copyright infringement and may lead to criminal prosecution. The compilation and input to the guide was obtained from experts in the field. Any changes and alterations can only be made with the approval of the authors. Reference to one gender can be interpreted to imply belonging to either gender. Any deviations from this policy and its supporting standard operating procedures require the approval from the assigned approval committee. All deviations, comments and suggestions could be emailed to policies@netcare.co.za Page 2 of 9
1. POLICY STATEMENT AND PURPOSE... 4 2. RISKS... 4 3. POLICY APPLICABILITY... 4 4. DEVIATION FROM THIS POLICY... 4 5. PROMOTING ETHICAL AND LAWFUL CONDUCT... 5 6. CONTROL MEASURES AND STRATEGIES... 5 6.1 GIFTS AND HOSPITALITY... 5 6.2 CONTRACTUAL RELATIONSHIPS... 5 6.3 UNAUTHORISED PAYMENTS... 6 6.4 COMPLIANCE WITH ETHICAL STANDARDS IN THE SUPPLY CHAIN... 6 6.5 PROCUREMENT PRACTICES... 6 6.7 CONTRIBUTIONS TO POLITICAL PARTIES AND CHARITIES... 6 6.8 TRAINING... 7 7. POLICY FRAMEWORK AND LEGAL FRAMEWORK APPLICABLE... 7 8. WHISTLE-BLOWING, REPORTING AND REMEDIAL ACTION... 8 9. TERMINOLOGY... 9 10. REFERENCE... 9 Page 3 of 9
1. POLICY STATEMENT AND PURPOSE The Netcare Group prohibits corruption, bribery and economic crime in any form. The Group is committed to do everything lawful, ethically and with integrity, ensuring Group values are upheld. A zero-tolerance stance is adopted and corruption will not be tolerated, whether the influence is internal or external to the organization. Netcare is a proud participant to the UN Global Compact Principles. This policy provides the framework to guide employees in dealing with corruption and economic crime situations. Due consideration has been given to the South African legislative framework, the UK Bribery Act, 2010 and the Foreign Corrupt Practices Act 1977 and the Prevention of Corrupt Activities Act No 12 of 2002. 2. RISKS i. A corrupt transaction of any kind represents a legal, and compliance risk. ii. Significant reputation risk can be attributed to Netcare if it is accused of, or found to be guilty of corrupt practices, ultimately destroying the trust relationship with stakeholders of the Group. 3. POLICY APPLICABILITY This policy is applicable to all employees and directors of the Netcare Group. Employees of the Group include full-time, part-time and consultants that render services in any of the divisions, subsidiaries and associated companies. All suppliers dealing with the Group will declare their compliance and support with this policy to eradicate corrupt practices. 4. DEVIATION FROM THIS POLICY Any breach of applicable anti-corruption laws, regulations and guidelines are seen in a very serious manner. If reasonable grounds exist, demonstrating negligent conduct, a dismissal may follow. Employees may be subject to civil and/or criminal prosecution. The business Page 4 of 9
relationship with non-employees and business partners that violates this policy will be terminated. 5. PROMOTING ETHICAL AND LAWFUL CONDUCT i. Netcare acknowledge the importance of promoting a culture and behavioural conduct that is ethical and lawful at all times. This is achieved by means of the following key guiding principles. It includes: a. Commitment from the Board and Executive committee to set the moral and ethical direction of the organisation so that others can follow in their guiding footsteps; b. Risk assessments conducted in high risk areas with mitigating controls introduced; c. Regular awareness and staff training to take place to ensure diligence and awareness of actions that may be interpreted as corrupt activities or bribery; d. Ongoing communication within the stakeholder community of Netcare will take place to ensure all are aware of the zero tolerance attitude. This include the role of senior management to ensure all people reporting to them, are aware of this policy. e. Monitoring, auditing and reviewing the environment as a preventative step to mitigate risk and exposure. 6. CONTROL MEASURES AND STRATEGIES 6.1 Gifts and Hospitality Netcare recognise that gifts and hospitality is perceived to affect the outcome of business transactions and as such a strict policy is in place limiting the value of offers that can be received. See policy COR10 Gifts and Hospitality. 6.2 Contractual relationships All contractual relationships between Netcare and its business partners should be reduced to writing and signed by the parties. All contracts have to be approved in line with the Limits of Approval Framework of the Group (Finance Policy FIN01). Page 5 of 9
Business partners may be subject to vetting, verification of information and due diligence to ensure Netcare limits inappropriate business association. As such all business partners must keep proper books and record that may be subject to the Internal Audit Division of the Netcare Group. 6.3 Unauthorised payments No unauthorised payments are allowed. All payments must have supporting documentation and or contracts to ensure underlying services are in place to justify the payment. 6.4 Compliance with ethical standards in the supply chain Netcare will communicate and make known to all business partners its policy relating to antibribery and corruption. This will also be used as an encouragement to pledge compliance and adoption of this policy. Suppliers will further sign the Procurement PRC05 Terms and Conditions that states their compliance with anti-corruption and eradication of economic crime. 6.5 Procurement practices Netcare will conduct all procurement in a fair and transparent manner. Where it is reasonably suspected that a specific supplier or contractor pays bribes, Netcare will avoid and discard any further dealings with such a supplier, and may terminate any agreement where bribes have been confirmed. Tender documents will include a declaration of interest and anti-corruption clause. Netcare staff must disclose all their related business transactions as per the Conflict of Interest standard operating procedure COR04.S01. 6.7 Contributions to political parties and charities Netcare is an ardent supporter of democracy in South Africa. If any donation is made, it would be done in accordance with internal policies and the Independent Electoral Commission s (IEC) formula for political party funding, and would be accompanied by detailed disclosure in the Annual Financial Statements. Page 6 of 9
6.8 Training The Group will on an annual basis endeavour to train all staff to whom this policy is applicable. 7. POLICY FRAMEWORK AND LEGAL FRAMEWORK APPLICABLE The following legislation is applicable to the Anti-Corruption and Bribery environment. i. The Constitution of South Africa Act No 108 of 1996 which deals with the principles regarding procurement to be fair, equitable, transparent, cost effective and competitive for all trading in the public domain. ii. The Promotion of Administrative Justice Act No 3 of 2000, which aims to promote good governance, openness, transparency and accountability in the exercise of public power. iii. The Prevention and Combating of Corrupt Act No 12 of 2004 Activities Act that requires people in positions of authority to report corruption over R 100 000. Failure to report activities is a criminal offence. iv. The Companies Act No 71 of 2008 incorporates anti-corruption measures in the regulations that require the establishment of social and ethics committees. This committee is required to perform a wide range of activities, including monitoring the company s anti-corruption activities. The importance of directors' conduct to ensure no misleading or false records are made is noted as mindful provisions of the governance structures of the Netcare Group. v. The Financial Intelligence Centre Act 38 of 2001 requires reporting of activities that may constitute money laundering activities. The Group's action with regards to this act is encapsulated in the Netcare Group Risk, Audit and Forensic policy GR02 Fraud and Corruption. vi. The Promotion of Access to Information Act 2 of 2000, which is intended to foster a culture of transparency and accountability in public and private bodies and promote a society where people have access to information in order to protect their rights. vii. The Protected Disclosures Act 26 of 2000 which aims to promote the eradication of criminal. Other relevant guiding documents that form part of the stance against corruption include: Page 7 of 9
i. UN Global Compact - as a signatory and participant Netcare upholds the principle that businesses should work against corruption in all its forms, including extortion and bribery. ii. OECD recommendations on anti-corruption that prohibits bribes and extortion. iii. King III Report on Corporate Governance for South Africa encourages an inclusive stakeholder approach as adopted and confirmed by the Netcare Corporate Governance Policy COR 09 Stakeholder engagement. The following policies should be read in conjunction with COR12 Corporate Governance Anti-Bribery and Corruption: i. Corporate Governance Gifts and Hospitality COR10 ii. Corporate Governance Code of Ethics COR04 iii. Corporate Governance Conflict of Interests COR04.S01 iv. Corporate Governance Fraud and Corruption Policy GR02 v. Corporate Governance Fraud and Ethics Hotline GR07 vi. Corporate Governance Finance Limits of Approval FIN01 vii. Corporate Governance Procurement PRC03 Supplier Management viii. Corporate Governance Procurement PRC03.S01 Anti-bribery declaration Suppliers ix. Corporate Governance Stakeholder engagement COR09 8. WHISTLE-BLOWING, REPORTING AND REMEDIAL ACTION Reporting of incidents of violation or concerns is the duty of each and every stakeholder of the Group. The prescribed reporting mechanisms include: i. Directly to Line Manager; ii. Directly to the Group Risk, Audit and Forensic Services; iii. Directly to the Chief Executive; or iv. The Netcare Fraud and Ethics Hotline a. Fraud and Ethics Hotline 0860 372 831 b. Fraud E-mail address fraud@netcare.co.za Page 8 of 9
9. TERMINOLOGY Fraud: the unlawful and intentional false representation or concealment of facts resulting in actual or potential prejudice to another, Theft: the unlawful and intentional misappropriation of another s property with the intention to deprive the owner of its rights, Corruption: the abuse of a position of employment by; the offering or acceptance of a benefit that is not legally due, for the commission or omission of an act in connection with that position of employment, Irregularity: any act or omission of a material nature that may lead to the diminishing of shareholder value, where the act or omission is committed within the framework of the employee s: 10. REFERENCE 1. Netcare Staff. 2. UK Bribery Act. 3. Foreign Corrupt Practices Act 1977. 4. The Prevention of Corrupt activities Act 12 of 2002. 5. The Protected Disclosure Act 26 of 2000. 6. Promotion of Access of Information Act 2 of 2000. 7. The Financial Intelligence Centre Act 38 of 2001. 8. The Companies Act 71 of 2008 9. The Promotion of Administrative Justice Act 3 of 2000. 10. The Constitution of South Africa 11. UN Global Compact Principles. 12. OECD Guidelines for multinational enterprises. Page 9 of 9