Business Ethics


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Business Ethics

  1. 1. Code Of Business Ethics Lonmin Plc November 2004
  2. 2. CONTENTS The Workplace 4 The Environment 4 (a) Outside Business Interests 5 (b) Gifts, Entertainment, Travel, Hand-outs, Offerings, etc 5 (c) Involvement with Suppliers, Customers, etc 6 (d) Use of Confidential or Proprietary Information 6 (e) Personal Use of Company Information and Business Opportunities 6 (f) Political, Charitable and other Public Activities and Business Affiliations 7 (g) Interaction with the Press and Media 7 Adherence to Law 7 Non Solicitation 8 Promotion of Fair Competition 8 Protection of Lonmin’s Assets 8 (a) Funds 8 b) Assets 9 c) Company Functions 9 d) Intellectual Property 9 Relationships with Governments 9 Social Responsibility 10 Human Rights 10 Cultural Sensitivity 10 Disclosure 11 The Ethics Hotline 11 Ethical Decision Checklist 11
  3. 3. Our Way of Doing Business Lonmin is committed to the highest standards of social and business practices. The delivery of success to our shareholders results from the efforts of our people - it is their resourcefulness, professionalism and dedication that gives Lonmin its leading edge as one of the forerunners in the mining industry. To this end, all directors and employees are expected to observe the highest standards of integrity in the conduct of Lonmin’s business. The Board of Directors has approved a Code of Business Ethics to provide a framework within which all business practices involving Lonmin must be conducted, managed and regulated. This Code of Business Ethics has been compiled in accordance with the common values shared by all involved in the business of Lonmin, the general principles of law and internationally accepted ways of doing business ethically. In addition, comprehensive systems of control have been introduced to ensure that in attaining the objectives of Lonmin, we behave legally, ethically, appropriately and sustainably. Sir John Craven Brad Mills Chairman Chief Executive November 2004 3
  4. 4. Health and Safety Lonmin is committed to treating all employees fairly, with respect and dignity and in order to honour this commitment, Lonmin shall: • create and maintain a safe and healthy workplace through the design of the work environment, the planning and performance of work, the provision and use of all necessary equipment, tools and procedures, the appropriate training and the constant identification and elimination of risks present in the workplace; and • take appropriate measures to ensure that employees refrain from using any drug or alcohol in the work environment which could affect such an employees work performance and thereby posing a risk to the health and safety of other employees. The Workplace Lonmin shall: • reward employees fairly based on their qualifications and performance without discrimination on the basis of age, colour, creed, disability, ethnic origin, gender, marital or family status, religion or sexual orientation. In addition all promotions and recognition will be based purely on merit; • provide all employees with equal opportunities to training and skills development; • respect the privacy of all employees and safeguard the confidentiality of employee information; and • not tolerate behaviour which is tantamount to any form of harassment in the workplace and shall foster work environments that are free from harassment, intimidation and hostility of any kind. The Environment Lonmin acknowledges that its activities have a profound effect on the environment. To manage its obligations, Lonmin undertakes to: • understand the environmental impact of our activities and treat it as an integral factor in all decisions; • make the principles of sustainable development a fundamental part of Lonmin’s business strategies and day-to-day operations; • implement and maintain comprehensive environmental policies so that our actions are carried out in an environmentally responsible way; • be transparent about and accountable for our environmental performance; • refrain from doing business with third parties who do not conduct their business in an environmentally responsible manner; and • require all our business partners to have appropriate systems to safely handle hazardous materials. 4
  5. 5. Conflict of Interests Conflicts of interest are situations where employees may make decisions based on personal gain rather than the best interests of Lonmin. Further, even though an employee may not allow personal interests to influence their decision-making, the appearance of conflict will jeopardise the trust of Lonmin’s stakeholders should they perceive that decisions are made not solely with Lonmin’s best interest in mind. Our policies governing the conflict of interests set forth the guidelines and procedures to be followed by all employed by Lonmin in their dealings with fellow employees, suppliers, customers and competitors, and any persons or business concerns which are affected by any of the operations or activities of Lonmin, such as: - (a) Outside Business Interests Lonmin employees shall not: • operate in any capacity, serve as directors or work as employees or consultants for any competitor or any current or potential business partner; • use the resources of Lonmin to run private businesses or conduct work for another organisation; • confer any benefit, monetary or otherwise on a business partner or competitor of Lonmin in which such employee or a family member in his or her personal capacity, holds a beneficial interest; or • take personally yourself, your family or personal associates, directly or indirectly benefit from opportunities that may arise through the use of Lonmin’s intellectual property, information or position. When in doubt – disclose: (b) Gifts, Entertainment, Travel, Hand-outs, Offerings, etc Where anything is offered to an employee and/or a member of an employees’ immediate family for less than market value, the guidelines in determining a conflict of interest would be: • the value or frequency of the offer made is excessive having regard to internationally prevailing business standards; • should the receipt of such offering become a matter of public attention, the acceptance of such offering would jeopardise the trust that any stakeholder may have in Lonmin or may have the potential to negatively affect Lonmin’s reputation; and • is the offering of a nature that Lonmin would, in all probability, not reciprocate. In instances where it appears to be inappropriate to accept the item, an employee is advised: - • To tactfully refuse the offering; or • in exceptional circumstances, if to refuse such offering would reasonably cause embarrassment or hurt to the person making the offering, the employee may accept the offering on behalf of Lonmin and then advise the Company Secretary of its receipt, so that an appropriate course of action may be determined 5
  6. 6. (c) Involvement with Suppliers, Customers, etc Employees (and/or any member of his or her immediate family), should refrain from being associated with a supplier, contractor, customer, competitor, joint venture partner, service provider or other entity involved in business dealings with Lonmin. Examples of inappropriate involvement include: • the acquisition of non trivial interest in a business entity that deals with Lonmin; • holding a partnership interest or having a profit-sharing or incentive arrangement, creditor – debtor relationship or similar economic involvement with any business entity that deals with Lonmin; • serving in any capacity in a business entity that deals with Lonmin; or • acceptance of a loan, advance or other non-monetary benefit from a supplier, contractor, customer or other business entity, except for customary loans or advances from banks or other lending institutions. (d) Use of Confidential or Proprietary Information Employees and/or members of an employee’s immediate family should avoid activities, which involve the use or misuse and/or the disclosure of confidential or proprietary information of or concerning Lonmin or other companies gained by virtue of their employment, including more specifically the following: • buying or selling securities of Lonmin or another company when in possession of price sensitive information relating to that entity whether favourable or unfavourable; • disclosure of any information not already in the public domain relating to Lonmin or another company except to persons who are authorised to receive such information and where such disclosure is in the course of an employees normal duties and responsibilities as part of his or her employment; • recommending or expressing an opinion as to the buying, selling or holding of securities of Lonmin or another company; • speculating in securities of Lonmin or another company or in options to buy or sell such securities or other similar financial instruments relating to any such securities or selling any such securities short or generally trading in such securities for short-term profit. Lonmin has a detailed code of share dealing which should be consulted ahead of any proposed transaction in securities and clearance must always be sought in advance. (e) Personal Use of Company Information and Business Opportunities Employee and/or members of an employee’s immediate family shall not use the employee’s position with Lonmin for any personal gain or for the benefit of any third party, such as: • any personal exploitation of information to which an employee has access by reason of his or her employment with Lonmin; • personal use of any “business opportunity” in which Lonmin is or may be interested; 6
  7. 7. • speculation in ores, metals or other products of a type produced or traded by Lonmin where such speculation involves the use of such information to which the employee as access by reason of his or her employment with Lonmin. (f) Political, Charitable and other Public Activities and Business Affiliations In general we would not expect that a conflict of interest will arise from a director or employee’s affiliation with outside professional, political, civic or charitable organisations or (subject to written approval by Lonmin in advance) from directorships or trusteeships of non-competing business entities who do not trade with Lonmin. Any request for such approval should be submitted in writing to the Company Secretary. . An employee should disclose to the Company Secretary any such activities where the employee has reason to believe that an invitation to serve in any such organisation was offered primarily because of the person’s employment with Lonmin or where there is an implication of Lonmin’s interest or responsibility. In order to avoid such an inference, unless approved by the Company Secretary, in writing, an employee shall refrain from using Lonmin or its premises for charitable, political or other purposes outside the employee’s normal duties and responsibilities. (g) Interaction with the Press and Media Lonmin’s name shall not be used without prior written approval in any published article or as part of an employee’s public appearance in the media. To fulfil this commitment of being fair and honest to all of Lonmin’s business partners, all employees shall endeavour to: • treat them courteously, respectfully and in a professional manner; • commit only to what we as employees of Lonmin honestly believe Lonmin is able to deliver within the parameters of this Code of Business Ethics and honour the commitments made; • protect all information shared with Lonmin on a confidential basis by any of our business partners; • desist from attempting to improperly influence the decisions of existing or potential business partners by e.g.- offering gifts, if this Code would prohibit an employee of Lonmin from accepting the same if roles were reversed; and • select our suppliers objectively based on the long term best interests of Lonmin. An employee’s duty to avoid a conflict of interests is a continuing obligation situation that might, or may appear to constitute a potential conflict of interests to the Company Secretary. Adherence to Law All employees shall act in accordance with the Law of the jurisdictions in which Lonmin conducts its business. It is recognised that employees in some countries may be subjected to local pressures to engage in unlawful conduct. However, as representatives of Lonmin, employees owe their duties to the Company and are reminded that the interests of Lonmin will be best served if such pressures are resisted. 7
  8. 8. If you find yourself in this situation, your best course of action is to tell your line manager or their manager of your concerns. Furthermore in countries where corporate political contributions are lawful, such contributions may only be made with Board approval and must be accurately and fairly reflected as such in the company’s books, records and accounts. Proper Accounting Lonmin’s books, records and accounts are to reflect accurately and fairly, in detail all transactions and acquisitions and dispositions of assets in accordance with the highest standards of integrity and generally accepted accounting principles. No employee shall make false or misleading statements to either the internal or external auditors of Lonmin in connection with the preparation, audit or examination of any financial statement or otherwise. No payment made or to be made shall be approved without the adequate supporting documentation or with the intention that or understanding that such payment is for the purpose other than that described in such supporting documentation. Non Solicitation Lonmin does not approve of the making of any payment in any kind (gifts, favours, etc) to influence any act or decision relating to Lonmin’s business. No employee of Lonmin is to make, offer, promise or authorise an unlawful or improper payment of any kind, whilst knowing that such payment is intended as a bribe, payoff or rebate in an attempt to coerce any individual into awarding business opportunities to Lonmin. Employees are warned that such conduct could have serious consequences for Lonmin and the employee concerned. Lonmin’s views on non-solicitation should be clearly communicated to all parties that conduct business with Lonmin. Promotion of Fair Competition Lonmin strongly believes in a free market economy and embraces fair competition. Consequently, Lonmin avoids all actions that are anti-competitive or otherwise contrary to the laws that govern anti-competitive practices in the marketplace. Lonmin does not: • enter into agreements or employ practices in restraint of trade such as price- fixing, bid-rigging, collusion and “kick-backs”; or • employ illegal or otherwise improper means to obtain information from competitors, including: - offering bribes or gifts in the exchange of information; - soliciting confidential information from a competitor’s ex-employee now employed at Lonmin; and - misrepresenting Lonmin or its position in order to convince third parties to divulge information to Lonmin. Protection of Lonmin’s Assets All employees of Lonmin have a duty to safeguard its assets in order to protect its economic well-being and competitive advantage. Employees are therefore expected to, in respect of the management of: (a) Funds • exercise integrity, prudence and good judgement in incurring and approving business expenses and ensure that business expenses are reasonable and 8
  9. 9. incurred wholly, exclusively and necessarily in the best interests of Lonmin; • obtain authorisation for all transactions and expenses incurred; • not to conceal any funds or any transaction from either management and/or the auditors; • not to enter into any transaction for the purposes of unlawfully evading any tax, duty or other levy imposed by the government in those jurisdictions in which Lonmin conducts business either for the benefit of Lonmin or third parties. b) Assets • to use Lonmin’s assets prudently with due care and diligence; and • to take appropriate steps to protect Lonmin’s assets against theft, loss, damage and waste. c) Company Functions Lonmin will always thank its people for a job well done, and recognises that in-house social functions are a vital part of both peer group recognition and team building. However, it is easy for these proper activities to be perceived as excessive, particularly if attendance is restricted, and resentment will inevitably follow. The correct balance must be struck, and it is the responsibility of the organiser to ensure that the hospitality provided is not excessively lavish, and that attendance is open to all relevant employees. d) Intellectual Property • to take precautions to avoid inadvertent disclosure e.g., by not discussing such information with third parties and to take care in transmitting such information by fax or electronic mail; • to enter into confidentiality agreements with any parties to whom Lonmin is obliged to disclose such information restricting the further disclosure thereof; • not to release information to third parties without proper authorisation; • to use only properly licensed computer software; • not to reproduce, distribute or alter copyrighted materials such as computer software, books, audio, videotapes, journals and magazines without the permission of the copyright owner or authorised agent; • to employ ethical means of conducting research, development and exploration; and • to be honest in obtaining, interpreting, using and disclosing information. Relationships with Governments Lonmin respects the authority of the governments in the countries in which it conducts its business. It is therefore imperative that employees maintain an honest, transparent and ethical relationship with the government, their agencies, officials and personnel. Employees must ensure that when providing company information to representatives of the government, that same is accurate, comprehensive and in compliance with applicable laws and regulations relating to corporate participation in public affairs. 9
  10. 10. Social Responsibility Lonmin’s primary purpose is to deliver a return to shareholders over the long term. However, this implies that our business model must be sustainable and it is therefore a basic requirement that we conduct our business in a socially responsible manner. Lonmin is committed to continuously striving to improve the quality of life and contributing to the well-being of communities in which we conducts our business and whilst this support will take different forms in different countries and communities, Lonmin shall make every effort to: • support health, education and environmental initiatives; • support and work with voluntary and charitable organisations that respond to community needs; • become involved in and with the community to solve community problems; • encourage all employees to volunteer for community projects and support them in doing so; • encourage, support and seek partnerships with organisations which need Lonmin’s assistance whether they be schools or social service organisations; • involve local communities in decision making issues that affect them; • give preference to business partners who conduct their business in accordance with ethical standards consistent with its own; and • draw from the local labour pool to the extent possible. Human Rights Lonmin recognises that the Universal Declaration Of Human Rights is the foundation of freedom, justice and peace in the world. However it is also aware of violations of fundamental human rights in certain parts of the world, including the right to life, the freedom of conscience, religion and association. Whilst it is accepted that Lonmin cannot independently change this reality, we nonetheless support the protection of human life and dignity within our sphere of influence by subscribing to the principles laid down in the Universal Declaration Of Human Rights. Lonmin confirms its commitment thereto by complying with any sanctions or internationally agreed boycotts imposed by the United Nations and European Commission. Lonmin concedes that it is obliged to employ armed security guards to protect its business activities and assets, and its employees working in those operations, but does so in accordance with general law enforcement structures in the countries in which it conducts its business and the United Nations Basic Principles on the Use of Force and Firearms by Law Enforcement Officials. Cultural Sensitivity As representatives of Lonmin, all employees should be aware, when dealing with business partners in other countries and/or when visiting other countries with family members that their behaviour is a reflection on Lonmin and are therefore expected to familiarise themselves with the norms, laws and customs of the respective countries and abide thereby. 10
  11. 11. Disclosure The Board of Directors is responsible for the management of Lonmin’s Code of Business Ethics (“the Code”). Any person who becomes aware of any existing or potential violation of this Code is required to promptly notify the Company Secretary. In the United Kingdom contact: Rob Bellhouse on +44(0)207 201 6052 In South Africa contact: Peter McElligott on +27 (0)11 516 1343 The Ethics Hotline As an alternative, the Ethics Hotline is available to all employees who wish to report activities that they feel are not consistent with the spirit of this Code. United Kingdom Republic of South Africa Whistle-blowing legislation such as this must strike a balance between a person’s right to free speech and protecting the reputation of the person(s) against whom an unfair or unfounded allegation is made. All complaints must therefore be factual and not based on office gossip/rumour and/or malicious opinion. In addition the failure to “blow the whistle” in cases where employees know of misconduct arising under this Code is regarded as a serious offence. The Ethics Hotline is operated by an external specialist provider. All reports made (whether by phone, e-mail or other route) are fully confidential and can be anonymous if you prefer. Reports made are referred onwards to the Group Company Secretary of Lonmin Plc, who chairs the Company’s Ethics Committee. Lonmin’s Ethics Committee shall take all action it deems appropriate to investigate any violations of this Code reported through the Ethics Hotline, but will in all cases respect the confidentiality of the “whistleblower”. If a violation is found to have occurred, the Ethics Committee will instruct management to take the appropriate disciplinary action. Ethical Decision Checklist When faced with a decision, one needs to run through five key questions to satisfy oneself that it is appropriate to proceed: 1. is it legal? 2. is it consistent with Lonmin’s policies? 3. for whose benefit is the proposed action? 4. does the action match up to Lonmin’s Code of Business Ethics?; and 5. how would it be seen if reported on the front page of tomorrow’s paper? If in doubt, do not act, rather seek the advice of your manager or Lonmin’s legal department. 11