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Annual Report 2015

Comprehensive Implementation of Anti-Corruption Policy

Comprehensive Implementation of Anti-Corruption Policy

Fighting corruption is among the priority tasks of the Long-term Development Programme of Federal Grid Company.

During 2015, the Company has continued to improve its anti-corruption activities, taking into account recent changes in anti-corruption legislation, and the most important event of the beginning of the year – Federal Grid’s joining the Anti-Corruption Charter of the Russian Business and its inclusion in the Consolidated register of parties to the Charter (Certificate No. 2041 dated 13 March 2015).

In the reporting year, we developed a new version of the Anti-corruption Policy of Federal Grid Company, which was later approved by the Board of Directors (Minutes No. 280 dated 24 August 2015).

Principles and Tasks of Anti-Corruption Policy of Federal Grid Company

The anti-corruption policy is an element of the internal control and risk management system of Federal Grid Company and provides a set of measures to establish rules, procedures, organisational structure and corporate culture aimed at preventing corruption and reducing reputational risks and risks of imposing penalties and sanctions to the Company for bribery of officials.

The principles and tasks set out in our Anti-Corruption policy are in line with the best Russian and international anti-corruption standards.

In order to enhance the efficiency of control over the implementation of measures for preventing and combating corruption, the Audit Committee of the Board of Directors has been included in the anti-corruption management structure (table)

Improvement of the anti-corruption management system

Main principles

  • Full compliance of Anti-Corruption Policy with applicable legislation and generally accepted rules
  • Zero tolerance towards corruption in all its forms and manifestations that includes an absolute prohibition for managers and employees to participate in corrupt practices
  • Strict observance of rights and legitimate interests of employees, partners and counterparties when implementing anti-corruption measures
  • A «tone at the top» set by senior managers and directors when creating a culture of zero tolerance towards corruption and building an anti-corruption system
  • Employee involvement in the design and implementation of anti-corruption standards and procedures
  • Proportionality of anti-corruption procedures and corruption risks
  • Liability for corruption of all employees irrespective of their position, length of service or other conditions
  • Continuous control over, and regular monitoring of, the effectiveness of anti-corruption standards and procedures

Main tasks

  • To ensure compliance with the requirements of Article 13.3 of the Federal Law «On Anti- Corruption» and other laws and regulations in the anti-corruption area
  • To perform compliance control, including anticorruption compliance control
  • To establish an effective legal mechanism to prevent and fight corruption
  • To establish an effective mechanism for implementing measures to prevent and fight corruption
  • To prevent corrupt practices and to ensure liability for corruption offences
  • To build awareness and uniform understanding among employees, shareholders, members of the governing and control bodies, partners and counterparties of the Company’s position of zero tolerance towards corruption in all its forms and manifestations
  • To minimise the risk of the Company’s involvement in corrupt activities

Focus Areas of the Anti-Corruption Policy Implementation in 2015

Regulatory framework development

To improve our anti-corruption regulatory framework, we have introduced the following changes therein in the reporting year:

  • The Regulations “On exchanging business gifts and on reporting by employees of the Executive Office on all gifts received in connection with their official position or performance of official duties, on handing over and evaluation of gifts, their disposal (repurchase) and entering proceeds to an account” were approved by the Administrative Order of Federal Grid Company No. 347 dated 26 August 2015
  • Similar regulations were approved in branches and subsidiaries of Federal Grid
  • Working committees of the Company’s Executive Office and branches were created to decide on the necessity to dispose or otherwise use business gifts to support the Federal Grid’s activities
  • The Administrative Order of Federal Grid Company “On Approval of Regulations on Conflicts of Interest Resolution” No. 207 dated 25 April 2014 was amended in accordance with the Federal Law No. 285-FZ dated 05 October 2015

Employee training and development

Employees of the Department of Operational Control and Compliance (DOC&C) refresh and update their professional knowledge and skills regularly. Due to the high level of professionalism, the Department leadership team is included in the Anti-Corruption Expert Council on the Chamber of Commerce and Industry of the Russian Federation.

In 2015, the DOC&C employees received training on various topics, including:

  • Meeting the requirements of the Russian and international legislation with regard to anti-corruption in organisations
  • Meeting the requirements and practical application of the Russian procurement legislation
  • Internal audit and anti-fraud activities
  • Creating a system of compliance control and corruption risk management

In addition, a number of training videoconferences were conducted for the staff of the Executive office and branches devoted to anti-corruption activities and transparency of the Company’s business.

Anti-corruption control and corruption risk management

In order to exercise a risk-based approach to the implementation of the Anti-Corruption Policy in Federal Grid Company, a Corruption risk map and Matrix of corruption risks and anti-corruption control procedures were developed in accordance with the procedures and techniques of Federal Grid’s internal control and risk management system.

To minimise corruption risks, a series of anticorruption control procedures were conducted in 2015, including:

  • Submission of a monthly report on the contracts made, including the chain of ownership of counterparties, to the Russian Ministry of Energy, the Federal Financial Monitoring Service (Rosfinmonitoring) and the Federal Tax Service of Russia
  • Anti-corruption review of documents under 13,846 transactions, including procurement procedures, followed by specific actions aimed at preventing and/or compensating losses and missed profit under these transactions
  • Review of documents submitted to receive charitable assistance, as well as monitoring of the use of funds allocated to 55 organisations in the amount of more than RUB48 mln
  • Anti-corruption review of 6,325 organisational and administrative documents and their drafts in the Company’s Executive Office and branches
  • Declaration of conflicts of interest by the Company’s management team with the follow up check of more than 5 thousand declarations, as well as the work on detecting conflicts of interest, settlement of pre-conflict situations and resolution of conflicts of interest in the Company
  • Monitoring transactions for conflicts of interest, timely receipt of information about changes in the chain of ownership of counterparties, as well as the inclusion of an anti-corruption clause and other mandatory conditions in contracts
  • Monitoring of the Company’s requests for payment under bank guarantees due to the failure of its counterparties to perform their contracts obligations. In 2015, 293 requests were submitted for the total amount of RUB22.5 billion

Evaluation of the effectiveness of the Anti-Corruption policy – annual employee survey results

7% in the Executive Office
increase in the number of employees who assess the Anti-Corruption policy as effective compared to 2014
7% in the Executive Office
increase in the number of employees who are ready to report corruption
increase in the awareness of where to refer in case an employee becomes aware of possible corruption acts

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