Business Integrity Policy - Kvaerner · Policy: Business Integrity Doc. No. 01-A-AAA003_P Issued date: 11.05.2012 Policy Owner: Kvaerner EVP Business Support Revision: 1.0

Policy: Business Integrity Doc. No. 01-A-AAA003_P Issued date: 11.05.2012 Policy Owner: Kvaerner EVP Business Support Revision: 1.0 Page 1 of 16 © 2012 Kvaerner. No part of this document or the information it contain may be reproduced or transmitted in any form or by any means without the permission of Kvaerner. This document is no longer controlled once downloaded.

Business Integrity Policy

A Kvaerner Policy

List of Content:

1. Policy Scope ................................................................................................................ 3

1.1. Background and purpose ........................................................................................................................... 3

1.2. Executive summary .................................................................................................................................... 3

2. Business Integrity Principles ...................................................................................... 4

3. Roles and Responsibilities ......................................................................................... 4

3.1. Responsibilities as a Kvaerner employee .................................................................................................. 4

3.2. Responsibilities as a Kvaerner leader ........................................................................................................ 4

3.3. Responsibilities of Corporate EVP Business Support and VP Quality Management & Enterprise Risk ... 5

3.4. Management Review .................................................................................................................................. 5

4. Execution of this Policy .............................................................................................. 5

4.1. Training ....................................................................................................................................................... 5

4.2. Whistleblowing channel .............................................................................................................................. 5

5. Human Rights .............................................................................................................. 6

5.1. Introduction ................................................................................................................................................. 6

5.2. Freedom of expression ............................................................................................................................... 7

5.3. Freedom of association .............................................................................................................................. 7

5.4. Labour conditions ....................................................................................................................................... 7

5.5. Child Labour ............................................................................................................................................... 8

5.6. Harassment and Discrimination ................................................................................................................. 8

5.7. Purchase of sexual services ....................................................................................................................... 8

6. Corruption and improper payments ........................................................................... 8


6.1. Introduction ................................................................................................................................................. 8

6.2. Corruption and bribery ................................................................................................................................ 9

6.3. Facilitation Payments – rules and examples .............................................................................................. 9

6.4. Permitted gifts and entertainment expenses ............................................................................................ 10

6.5 Conflict of Interest ..................................................................................................................................... 11

6.6 Charitable donations and sponsorship ..................................................................................................... 12

6.7 Political contributions ................................................................................................................................ 12

6.8 Fair Business Competition ....................................................................................................................... 12

6.9 Maintaining Accurate and Truthful Books and Financial Records ........................................................... 12

7 Fraud............................................................................................................................... 13

7.1 Introduction ............................................................................................................................................... 13

7.2 Typical Yellow Flags ................................................................................................................................. 13

8 Kvaerner and its partners, suppliers and subcontractors ......................................... 14

9 Disciplinary actions ....................................................................................................... 14

10 Training....................................................................................................................... 14

11 Questions and reporting of violation ....................................................................... 15

11.1 Guidelines for assessment of situations ................................................................................................... 15

11.2 Where to seek guidance ........................................................................................................................... 15

11.3 Possible violation - realised in hindsight................................................................................................... 15

12 References ................................................................................................................. 16

13 Revision Summary .................................................................................................... 16

A Kvaerner Policy and/or Procedure is a document intended for internal use within Kværner ASA, its subsidiaries and affiliates (“Kvaerner”). The document has been developed to achieve consistently high quality operations throughout the corporation. However, neither the Kvaerner Policy System nor any parts thereof shall be interpreted as constituting any form of representation of warranty by Kvaerner as to any level of performance or otherwise or forming a contract or any part thereof (including an employment contract) entered into by Kvaerner unless otherwise expressly confirmed in writing by a duly authorised representative of Kvaerner.


1. Policy Scope

1.1. Background and purpose

This Business Integrity Policy sets out the mandatory rules and regulations for Kvaerner in respect of Business Integrity, in order to ensure that all business operations in Kvaerner are carried out in an ethical manner and in compliance with applicable laws and regulations. This policy is a tool for Kvaerner’s employees in order to prevent and detect breach of human rights, bribery, corruption, or any other non-compliant conduct. The principles of this Business Integrity Policy, together with other Kvaerner governing principles, are set out in the Kvaerner Code of Conduct. In case of discrepancies between this Policy and the Code of Conduct, the latter shall prevail.

This Policy applies to Kværner ASA and its subsidiaries including partly-owned subsidiaries where Kværner ASA directly or indirectly controls more than 50% of the voting interest. The Policy applies to all personnel employed by these companies. In companies where Kvaerner holds less than 50 % of the voting interests, Kvaerner shall do its utmost to ensure that the principles of this Policy are adhered to. Kvaerner and its partners, suppliers and subcontractors are addressed in section 8. As a company listed on Oslo Stock Exchange, Kvaerner is subject to the provisions in the Norwegian Penal Code, which includes the corruption provisions. The corruption provisions are applicable regardless of which country the actual activities take place and regardless of the nationality of the individuals involved. Kvaerner is also subject to the legislation of the countries in which Kvaerner is doing business, as well as collective bargaining agreements and other relevant agreements or conventions.

1.2. Executive summary

This Policy consists of three main sections:

Human Rights: Kvaerner’s commitment to human rights is detailed in section 5.

Corruption and improper payments: Kvaerner’s principles in respect of anti-corruption, bribery and improper payments, as well as guidelines for gifts and entertainment expenses, are detailed in section 6.

Fraud: Kvaerner’s principles in terms of fraud are detailed in section 7. As a Norwegian Any conduct which is inconsistent with the Kvaerner Code of Conduct, the Business Integrity Program, this Policy, human rights legislation and international declarations, or relevant compliance legislation must be promptly corrected and reported, and is subject to disciplinary actions (see sections 9 and 11). Further details of the Business Integrity program may be found under Business Integrity at the kNet (http://info.knet/BI/Pages/default.aspx).

http://info.knet/BI/Pages/default.aspx


2. Business Integrity Principles

Kvaerner is committed to conducting - and its employees are required to conduct - all its business with integrity, in accordance with applicable national and international legislation and the United Nations Universal Declaration of Human Rights (1948), respecting cultures and human rights of individuals in all the countries where Kvaerner operates. Integrity and avoidance of illegal and unethical behaviour concern everyone in Kvaerner.

It is vital for Kvaerner to build trust among all stakeholders, including customers, partners, employees and their families, shareholders, local communities in which Kvaerner operates and in the global society in general.

A sustainable and value-creating operation must balance short-term priorities with long-term objectives in relation to all stakeholders. Since trust must be built over time, Kvaerner shall have a long-term perspective in all its business activities.

Compliance with national, regional and international legislation and conventions is mandatory in Kvaerner, but business integrity often extends beyond pure compliance with laws. Kvaerner shall conduct its business in a manner that makes people proud of working with and for the company.

3. Roles and Responsibilities

3.1. Responsibilities as a Kvaerner employee

It is the responsibility of each Kvaerner employee to comply with the Business Integrity Policy. Besides ensuring their compliance with this Policy and all applicable anti-corruption legislation, Kvaerner employees should avoid taking any actions that would give an impression of improper or inappropriate conduct in business transactions. This Policy is a part of the Kvaerner Business Integrity Program, which is prepared in order to focus on human rights, anti-corruption and fraud in Kvaerner. Further details in respect of this program may be found under Business Integrity at the Kvaerner intranet kNet (http://info.knet/BI/Pages/default.aspx). If a Kvaerner employee is uncertain on how to resolve a particular problem in respect of compliance with Kvaerner’s Business Integrity principles, or if he or she finds themselves in an extraordinary situation which may require a breach of such principles, the employee shall immediately contact his/her line manager and seek guidance.

3.2. Responsibilities as a Kvaerner leader

It is the responsibility of individuals being leaders in Kvaerner to ensure that the principles set forth in this Policy is clearly understood by everyone and that all business conducted under their command is compliant with the Code of Conduct and this Policy. Leaders are expected to actively lead and promote the implementation of the Business Integrity Program and this Policy and being role models. They shall contribute actively to build and maintain a business integrity culture. Leaders in Kvaerner are responsible for holding the mindset, skills and competence in order to fulfil these responsibilities.

http://www.un.org/Overview/rights.html


http://info.knet/BI/Pages/default.aspx


3.3. Responsibilities of Corporate EVP Business Support and VP Quality Management & Enterprise Risk

The Corporate EVP Business Support is the owner of this Policy. The Corporate VP Enterprise Risk & Quality Management, reporting to the EVP Business Support, is the owner of the Business Integrity Program. The VP is responsible for providing and maintaining the necessary strategies, procedures, processes, plans and tools and for facilitating the implementation of this Policy and the Business Integrity Program, as well as monitoring the Policy’s application and effectiveness across Kvaerner. Furthermore, the VP is the head of the internal investigation team and the internal audit team. In the capacity as head of the investigation team, the VP receives all whistleblowing notices and ensuring that all identified Business Integrity concerns are properly evaluated, processed and completed.

3.4. Management Review

The Kvaerner Executive Management Team shall review Kvaerner’s Business Integrity Policy to ensure its continuing suitability, adequacy and effectiveness. The review shall include assessing opportunities for improvement and the need for modifications of the framework, strategy and objectives. Reports of the reviews shall be maintained and acted on before the subsequent review.

4. Execution of this Policy

4.1. Training

Awareness and dilemma training shall be conducted for specific professions and for all employees, see section 10.

4.2. Whistleblowing channel

Kvaerner employees have many ways of addressing questions about the application of the policies and the Code of Conduct and of reporting potential violations. It is of outmost importance that Kvaerner has a solid framework in place to clearly guide and support each individual working on Kvaerner activities on how to act in different situations and to have in place good supporting channels when anyone have questions:

Kvaerner employees are always encouraged when possible and feasible to raise questions and to report on issues relating to compliance to their line managers and representatives of senior management. It is the responsibility of all Kvaerner senior managers and line managers to support their teams in matters relating to this policy, including giving advice on proper procedure in case of actual or apparent violations.

The Kvaerner Corporate Quality Management & Enterprise Risk function exists to support employees in all questions relating to compliance. If you use the below link, launched today on our knet your question will then go directly to the VP of corporate enterprise risk and will be treated with strict confidentiality.

[email protected]

Any issue involving potential violation of Kvaerner’s zero tolerance approach on bribery and corruption should be reported immediately to the relevant Line Manager or alternatively to the Quality Management & Enterprise Risk function. Kvaerner employees may use the link below to report any cases you come across. All reports go directly to the corporate VP of enterprise risk.

mailto:[email protected]


Reports will be treated with strict confidentiality and, if preferred, the report may be submitted anonymously.

[email protected]

Regardless of channel of reporting, all allegations of potential violations of this policy brought in good faith will receive a fair and comprehensive investigation conducted with relevant internal and/or external assistance. All investigations regarding potential violations of compliance will be conducted in accordance with the principles set out in Kvaerner’s internal investigation procedures

If anyone suspects a violation, he or she needs to feel 100% safe that their notification will be handled professionally, and if he or she wants, be kept anonymous. In order for a person to notify, it is imperative to solid investigation routines in place and that appropriate disciplinary actions are taken when investigation proves that a violation has taken place.

The Kvaerner whistleblowing procedures are governed by the Governance Policy. Regardless of channel of reporting, all allegations of potential violations of this Business Integrity Policy brought in good faith will receive a fair and comprehensive investigation conducted with relevant internal and/or external assistance. All investigations in respect of potential violations of this Policy will be conducted in accordance with the principles set out in Kvaerner’s internal investigation procedures. This protection extends to those whose allegations are made in good faith, but prove to be mistaken. Kvaerner reserves the right to discipline persons who make bad faith, knowingly false, or vexatious complaints, reports or inquiries or who otherwise abuse this Policy.

5. Human Rights

5.1. Introduction

Kvaerner shall conduct its business in accordance with the fundamental human rights set out in the United Nations Universal Declaration of Human Rights (1948) which defines a number of fundamental principles on religious, political, cultural, economic and social rights. Kvaerner is furthermore committed to the International Labour Organization’s (ILO) eight core conventions dealing with the rights of employees.

Important business related human rights which are dealt with in International Human Rights legislation include:

Freedom of expression

Freedom of association and collective bargaining

Labour standards

Prohibitions against forced and child labour

Minority rights

Kvaerner is responsible for respecting the human rights of its own employees and employees working in the projects where Kvaerner has ownership control or operating responsibility. Kvaerner shall also extend the human rights requirements to joint venture partners, suppliers, contracting staff, contractors and influence others that Kvaerner has contractual relationships with. To ensure compliance by parties with whom Kvaerner has a contractual relationship, appropriate wording shall be included in all contracts where Kvaerner has sufficient influence.




http://www.ilo.org/


5.2. Freedom of expression

All Kvaerner employees have the right to express their views and concerns in good faith, for example with respect to their working conditions, without fear of reprisal. The right to freedom of expression does not include unlawful discrimination or abuse of confidential information pertaining to Kvaerner. Employees who believe their right to freedom of expression have been infringed may report this as a concern through the whistleblowing channel.

Q & A Q: An employee is distributing pamphlets containing abusive language towards a minority. Is this acceptable by reference to the freedom of expression? A: No this would constitute discrimination and could be illegal depending on its form and content. Hence it cannot be perceived to be expressed in good faith.

5.3. Freedom of association

All Kvaerner employees have the right to be union members and to be represented in collective bargaining agreements. In locations where these rights are restricted, Kvaerner will seek other solutions to provide all employees with opportunities to influence their work situation and in accordance with collective bargaining agreements. Q&A Q1: Kvaerner is considering establishing operations in a country where unions are prohibited by law. Is this a show stopper for the project? A1: No, this is not a show stopper. Kvaerner has to comply with local laws and must find other means of facilitating the dialogue with its employees. Q2: At a project site, a union representative complains that the management obstructs union activities by preventing use of the project facilities for union meetings and not allowing meetings to be held within working hours. How would you deal with these allegations? A2: Unions should be allowed to use the project meeting facilities and to hold meetings within working hours if practicable.

5.4. Labour conditions

Kvaerner is committed to respect the International Labour Organization’s (ILO) eight core conventions. Key issues are freedom of association, the right to collective bargaining, and the prohibition of forced labour. The conventions also address some basic requirements for wages, working hours, social benefits and the working environment, which must be considered in the context of legal requirements and best practices in the country in question. Reference is also made to the People Policy and the Personnel Handbook of Kvaerner.


5.5. Child Labour

Kvaerner does not support child labour and Kvaerner does not under any circumstances employ children below the age of 16.

5.6. Harassment and Discrimination

Kvaerner employees shall be entitled to a workplace which is free from harassment and discrimination. (Ref: Kvaerner Code of Conduct, available at www.kvaerner.com and Kvaerner People Policy, available on the Kvaerner intranet). All Kvaerner employees shall behave respectfully and with integrity towards anyone he/she interacts with through his/her work. Each Kvaerner employee shall contribute to an environment that is free from discrimination due to religion, political opinion, social group, marital status, skin colour, gender, sexual orientation, age, nationality, race, national or ethnic origin, cultural background or disability. No Kvaerner employee shall bully, harass, degrade, threaten or otherwise disrespect other individuals.

5.7. Purchase of sexual services

Kvaerner is against the purchase of sexual services. According to the Norwegian Penal Code the purchase of sexual services in Norway or abroad is illegal for Norwegian citizens or persons domiciled in Norway. Offenders may be charged in Norway even if the practice was not illegal in the country where it took place.

6. Corruption and improper payments

6.1. Introduction

Kværner ASA and its subsidiaries are subject to the corruption provisions in the Norwegian Penal Code. Kvaerner is also subject to the legislation in the countries where Kvaerner does business. Furthermore, the legislation of other countries may apply, such as the UK Bribery Act and the US Foreign Corrupt Practices Act, also outside the UK and the US. In addition to its legal implications, corruption has a negative impact on the community. Corruption negatively impacts economic growth and increases the cost of doing business and distorts the playing field. Furthermore, corruption makes commercial transactions more uncertain, for example in respect of granting of licenses, signalises that other business crimes are permitted, undermines the employee’s belief and trust in management and subsequently exposing our reputation at a significant risk. Kvaerner is against all forms of corruption and shall at all times ensure that corruption does not occur in Kvaerner’s business activities in any of the jurisdictions where Kvaerner operates. Corruption includes a wide variety of activities. The most common form of corruption is bribery, which is illegal in Norway and most other countries. Kvaerner does not allow bribery in any form. The definition of bribery can for example be an offer or receipt of a gift, a loan, a fee and any other reward or advantage between individuals as a incentive to do something which is dishonest, illegal or a breach of trust, in the conduct of the company’s business.

Corruption, as defined above, is prohibited in Kvaerner and violations will result in disciplinary actions (see section 9). Each legal entity and Kvaerner employees and leaders are responsible for to be familiar with the applicable laws and to seek legal advice as needed.

http://www.kvaerner.com/


6.2. Corruption and bribery

The Norwegian anti-corruption legislation is amongst the strictest in the world.

Examples of corruption are payments in order to obtain a license or a contract one is normally not entitled to.

The corruption provisions in the Norwegian Penal Code applies to all Norwegian citizens and companies, as well as foreign companies and individuals residing in Norway, for corruption committed in Norway and abroad, regardless of whether the act is a criminal offence in the other country or not. The Penal Code also prohibits bribes paid indirectly through agents, consultants or other intermediaries. For guidance in respect of the legal framework, employees should contact Corporate Legal.

Kvaerner employees shall not, either directly or indirectly through a third party, offer anything of value to influence the actions or decisions of any official, other person in public or legal duty, any person acting on behalf of customers or sub-contractors/suppliers, or any other third party, or to otherwise obtain any improper advantage, in selling goods and services, conducting financial transactions or representing the company’s interests.

Regardless of the country /countries business is conducted, Kvaerner employees are prohibited from paying or receiving bribes under any circumstances. In Kvaerner, no one shall not offer, authorize, or pay bribes or anything of value to anyone and especially to a:

Customer or customer representative; or

Government official, political candidate, or political party, in order to obtain or retain business or secure any business advantage.

6.3. Facilitation Payments – rules and examples

Facilitation payments, also called “speed” or “grease” payments, are payments made to secure the expeditious performance of an action which the payer may already have a legal or other entitlement to e.g. the return of a passport at an airport. Such payments are most often small but can also be substantial. Other examples include paying small amounts to officials to secure permission to leave or enter a country, to clear goods through customs, or to unload shipments within reasonable time (sometimes avoiding costly delays). Facilitation payments are normally cash payments, but could also involve other favours. The payment demanded or paid may be modest and the consequences of not paying may be significant.

Illegal corruption is defined in the Norwegian Penal Code: If a person: a) for himself/herself or other persons, requests or receives an improper advantage or accepts an offer of an improper advantage in connection with a post, office or commission, or b) gives or offers anyone an improper advantage in connection with a post, office or commission.


Facilitation payments may be illegal under the Norwegian Penal Code where the recipient is not entitled to the payment.

Kvaerner employees shall never give nor encourage facilitation payments unless the employee is the victim of extortion - where demands for facilitation payments are associated with expressed or perceived threats to health or life, for example if an employee is placed in prison on a remote location with a demand for facilitation payment in order to be released. In such circumstances, the employee shall if possible contact his/her line manager to have pre-approval of the payment, preferably before the payment takes place and the payment shall be recorded and reported to the VP Quality Management & Enterprise Risk as part of the compliance reporting process. It is acknowledged that it may be difficult to assess the correct way of action in difficult and complex situations, or while one is under pressure. The important thing in such situations is that each individual situation is assessed properly, that the line management is consulted and that any facilitation payments made are reported together with an explanation of why the payment was deemed necessary in that specific situation.

6.4. Permitted gifts and entertainment expenses

Gifts to and from other parties, such as clients or partners, may be permitted if offered or received without any intention of obtaining an improper business advantage, and without any expectation of a return favour. Certain nominal, tangible gifts of a relatively small value may be given, and certain entertainment expenses may be paid, as long as they are legitimate and comply with the standards listed below. As a starting point, tangible gifts given or received by Kvaerner employees should never exceed NOK 500 in value (or the equivalent amount applicable for other countries), and preferably, gifts should be of a symbolic value only. Gifts in the form of cash or offer of employment shall never be given. Kvaerner employees may refer to this mandatory policy when refusing a gift exceeding the above value, in order to avoid insulting the offerer of the gift. It is important that all gifts are given and received in an open and transparent matter, and all Kvaerner employees are themselves responsible for ensuring that all relevant taxation and reporting regulations are complied with when offering or receiving a gift. Corporate Legal or line managers may assist in case of doubt in such situations. Gifts shall be recorded in a register administered by the Quality Management & Enterprise Risk function. In respect of entertainment expenses, such expenses shall be of a modest value and should be related to the business activity of Kvaerner. Social gatherings and dinners may be legitimate if the purpose is to maintain or create sound business relationships or to promote Kvaerner towards potential clients, provided that the event is not of an excessive nature. Meals in connection with business meetings are considered normal business conduct as long as the business content is significant and provided that the expenses are modest. Sponsored participation in any entertainment event which could be considered “excessive” shall be pre-approved by the business area EVP.If Kvaerner employees are invited to an expensive event hosted by for example partners, suppliers or clients, the employees should consult with its line manager before accepting.


Kvaerner employees shall not participate in any transactions or other business arrangements on behalf of Kvaerner where they directly or indirectly have, or could reasonably be suspected to have, a personal interest, financial or otherwise, or that could otherwise reasonably be determined to harm Kvaerner’s reputation.

Social events and entertainment: Kvaerner employees may only attend social events and entertainment connected with Kvaerner’ business with third parties that are considered modest. In a contract tendering environment, attendance at social events must be ethically justifiable and not perceived to influence business decisions.

If in doubt about gifts or entertainment expenses, all employees should consult with line management for guidance. Section 11 also contains useful guidelines.

6.5 Conflict of Interest

All Kvaerner employees shall act in the best interests of Kvaerner and take appropriate steps to avoid situations and positions that may create or appear to create conflicts of interest between own and Kvaerner interests. Kvaerner employees are also required to be on the alert when working in projects, where the client’s interests also need to be protected from conflicts with other parties’ interests.

A conflict of interest occurs when an individual has a personal interest that might compromise his or her professional duties, typically when an employee can influence a decision or the results of a process, and one or more of the following is true: The same employee has private interests in the outcome of the decision or the results of the process

Someone close to the same employee has an interest in the outcome of the decision or the results of the process. See below for explanation of “close to”

The Kvaerner employee is part of a business affiliation outside Kvaerner in which someone might gain advantage of the employees role as a Kvaerner employee and/or involvement in the decision-making

It might be perceived by others that the Kvaerner employee’s loyalty to Kvaerner is compromised due to the employee’s relationship to a person/company/organization.

Examples of someone “close” are:

A family member

A friend

A company in which one holds a significant interest

A person to whom one owes an obligation

A business associate or close colleague may also be included in this category.

Kvaerner employees should be particularly aware of potential conflicts of interest when serving as board members in companies where Kvaerner has no ownership, or in companies where Kvaerner has an ownership but the employee has not been appointed by or does not represent Kvaerner. When an employee is in one of these situations, it must be evaluated whether the relationship compromises his or her loyalty or perceived loyalty to Kvaerner. The evaluation must be conducted by line management.


Concerns about conflicts of interest may be taken up with Corporate Legal or the Corporate Enterprise Risk function (by sending an e-mail to [email protected]).

6.6 Charitable donations and sponsorship

Charitable donations are defined as payments made or goods given for the benefit of a community. Typical areas for such donations are education, health, sports, culture, support to non-governmental organizations and other social welfare causes. Payments are made without demand or expectation of a business return, but may result in goodwill for Kvaerner.

All material charitable donations or all sponsoring must be cleared by line management and SVP Corporate Communication prior to being implemented. Full documentation must be made available and kept after implementation. A sponsorship is a transaction where a sponsor makes a payment, in cash or in kind, to associate its name with an activity or an organization, and receives specific rights and benefits in return, such as the promotion of the sponsor’s name, products and services.. There must be documented tangible benefits for Kvaerner associated with any sponsorship, such as commercial gain, professional development, enhanced profiling etc. All sponsoring relationships shall be structured as ‘win-win situations’ whereby both parties achieve some gain. Criteria used in Kvaerner are that sponsorships should be strategic and reflect Kvaerner’s values, quality and profile.

No religious or political groups or organisations shall be sponsored. There shall be no personal conflict involved in the decision to sponsor an organisation. In situations where a conflict of interest exists, the conflicted individual shall withdraw from any associated decision-making process.

6.7 Political contributions

Political contributions are any contribution, made in cash or in kind, to support a political cause or party. Neither Kvaerner nor any Kvaerner employee or Board member shall make financial contributions to political parties on behalf of the company. This does not preclude Kvaerner from supporting political views in the interest of the company. Kvaerner employees may choose to participate in political or religious activities in their own personal capacity, so long as they do not use any resources that are the property of Kvaerner for these activities.

6.8 Fair Business Competition

Kvaerner is committed to fair and open competition. Under no circumstances shall Kvaerner engage in anti-competitive practises or other activities in violation of applicable anti-trust laws and directives.

Kvaerner has a separate Competition Law Compliance Manual which is mandatory for all Kvaerner employees. The manual is integrated in the Legal Policy, available at the kNet.

6.9 Maintaining Accurate and Truthful Books and Financial Records

It is essential that the integrity of Kvaerner’s books, records and public disclosures is maintained. This depends on the validity, accuracy and completeness of the information supporting the entries to our books of account. Accounting and financial reporting practices must be fair and proper, in accordance with, as applicable, relevant corporate standards, international financial reporting standards (IFRS) and relevant



background law. Reference is made to the Financial Planning and Reporting Policy with corresponding standards and tools. Kvaerner employees shall not engage in any misleading or deceptive financial practice, and all employees shall report any such practices according to the procedures outlined in Section 11 if one becomes aware of them.

7 Fraud

7.1 Introduction

Sometimes corruption cannot be easily distinguished from other types of economic crimes such as fraud, embezzlement, theft of physical assets or stock, money laundering, information theft, tax evasion and insider trading. Such criminal acts often occur together in large and complex cases. The term “fraud” comprises several irregularities which have breach of integrity as a common denominator. All forms of fraud are strictly prohibited for all Kvaerner employees, and may be subject to disciplinary actions as well as penal consequences under Norwegian or other law and conventions.

7.2 Typical Yellow Flags

A “yellow flag” issue is a fact or circumstance out of the ordinary which may be an indication of fraud and should merit further investigation and caution before proceeding. Typical yellow flags are:

Activities based in a country with a low score on Transparency International’s Corruption Perception Index (CPI). The index may be found at www.transparency.no

A business relation that refuses to adhere to the principles set out in the Kvaerner Code of Conduct or does not itself have ethical guidelines

A business relation who refuses to provide complete information or required disclosures

A business relation with a needlessly complicated corporate structure; or who makes use of shell or holding companies or a blind trust

A business relation who requires that payment be made to a third party or in a country which has no connection to the transaction or operations, including tax havens

A request for an unusually large commission, success fee, or irregular payment structure

A request for reimbursement of poorly documented or questionable expenses

A business relation facing financial difficulties

Credible reports of fraudulent behaviour.


8 Kvaerner and its partners, suppliers and subcontractors

Kvaerner encourages its partners, suppliers and subcontractors to strive beyond legal compliance in areas such as governance, human rights, social impact and protection of the environment. Kvaerner incorporates ethical, social and environmental requirements in the Supplier and Subcontractor Declaration, which all suppliers and subcontractors are required to sign. Kvaerner commits to monitoring the performance of its suppliers and subcontractors and will take immediate relevant remedial steps in cases where the ethical performance of its business partners comes into question. (Ref Supplier and Subcontractor Declaration, available at www.kvaerner.com ). With respect to partners, all business integrity policies will be addressed in a mutual agreement.

Kvaerner employees who become aware of or suspect with good grounds ethical misconduct by any of Kvaerner’s partners, suppliers or subcontractors shall report such to line managers or through the Kvaerner whistleblowing channel, available at www.kvaerner.com.

9 Disciplinary actions

Kvaerner will not accept any violation of relevant laws, regulations or of this Policy without taking appropriate actions to mitigate such violation.

Properly founded allegations or evidence of violations of the Policy will result in investigations which will result in disciplinary responses if allegations are proved. Disciplinary responses will range from verbal warnings (from line managers or HR) to dismissal. In appropriate cases, Kvaerner will support criminal investigations and prosecutions.

10 Training

All Kvaerner employees are expected to adhere to Kvaerner values in their daily work. In accordance with the Business Integrity Program, there will be specific compulsory Business Integrity training for all employees. The training will vary depending upon the employee’s position and authority. All training shall be recorded and reported. Each participant shall sign-off after participation and Human Resources shall store evidence of the sign-off sheets. High Level Training schedule:

The members of the Executive Management team class room training

All leaders level 3 and 4 class room training

Supply management professionals and leaders class room training

Business development leaders and key account professionals class room training

Project directors/project managers class room training

Members of the management team in projects class room training

Project specific dilemma training class room training

Induction training class room training

Integrate in all leadership development 2-3 hours

All employees with access kNet e-learning




11 Questions and reporting of violation

11.1 Guidelines for assessment of situations

It is important that all Kvaerner employees should not hesitate to seek guidance in case of uncertainty in respect of compliance with this or other Kvaerner policies. Kvaerner employees have many ways of addressing questions about the application of the policies – see below.

In case of uncertainty as to whether an action complies with this policy, the following questions should be raised:

Is it the right thing to do?

Are all facts available and have I assessed the facts thoroughly?

Are all options identified and evaluated?

Which company policies and/or legal requirement are applicable and have to be complied with?

Is it necessary to seek guidance?

What would be the outcome of my decision?

In retrospect - would I be proud of the choice I made?

How would my decision be regarded later, for instance in one year?

Do I have any reservations talking to my colleges about this?

If my choice became commonly known, would it harm the ,company’s reputation?

How would it be perceived by most people if it was posted in the newspapers, communicated on television or in internet?

11.2 Where to seek guidance

Where this Policy does not answer employee’s questions, guidance may be sought from:

Line managers,

Corporate Legal; or

VP Quality Management & Enterprise Risk

In some cases, this Policy answers the questions Kvaerner employees may have on how to act. In other cases, the subject matter is so complex that additional guidance about that particular area may be required.

Employees may also use the whistleblowing channel to obtain advice. Reference is made to section 4.1 for further information.

11.3 Possible violation - realised in hindsight

In case the employee realises in hindsight that a situation that he/she has been involved in may have been a breach of law, Kvaerner Code of Conduct, this Policy or international recognised standards for ethical behaviour, the employee shall report the situation to his/her line manager. The Line manager shall further report it to the Corporate VP Quality Management & Enterprise Risk.


12 References

Code of Conduct: Kvaerner Code of Conduct, available at

http://www.kvaerner.com/en/Environment--Society/Kvaerner-Code-of-Conduct/

Policy: Governance Policy, Legal Policy, People Policy, Supply Management

Policy, Financial Planning and Reporting Policy

Procedures: None

13 Revision Summary

Revision 1.0 1st Kvaerner revision

http://www.kvaerner.com/en/Environment--Society/Kvaerner-Code-of-Conduct/

Documents

Business Integrity Policy - Kvaerner · Policy: Business Integrity Doc. No. 01-A-AAA003_P Issued date: 11.05.2012 Policy Owner: Kvaerner EVP Business Support Revision: 1.0