Case study: How Fortuna combats corruption
Fortuna is a Canadian mining company established in 2005 and dedicated to the production of precious metals. In 2019, its exploration activities were focused on Argentina, Mexico, Peru and Serbia. Fortuna believes that all its employees should act in an ethical and responsible manner. This behaviour is the starting point for the management of sustainability, together with respect for the laws and regulatory frameworks of each country where Fortuna operates.
This case study is based on the 2019 Sustainability Report by Fortuna published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
Based on its ethical guidelines, Fortuna rejects any kind of dishonest behaviour and maintains a zero-tolerance policy against corruption and bribery. Tweet This! In order to combat corruption Fortuna took action to:
- implement a Code of Ethics
- apply an Anti-corruption Policy
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With this case study you will see:
- Which are the most important impacts (material issues) Fortuna has identified;
- How Fortuna proceeded with stakeholder engagement, and
- What actions were taken by Fortuna to combat corruption
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What are the material issues the company has identified?
In its 2019 Sustainability Report Fortuna identified a range of material issues, such as financial performance and creation of economic value, occupational health and safety management, human and organisational development, environmental management. Among these, combatting corruption stands out as a key material issue for Fortuna.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly
Key stakeholder groups Fortuna engages with:
Stakeholder Group | Method of engagement |
Employees | · Meetings · Independent and group meetings · Employment contract |
Communities
| · Independent and group meetings · Guided visits · Radio · Social media networks |
Shareholders and Investors | · Reports · Various meetings (by telephone, · E-mail, board meetings) |
Customers | · E-mail · Telephone · Meetings |
Contractors | · Independent and group meetings · E-mail or telephone |
Suppliers | · E-mail, telephone · Independent and group meetings |
Government | · E-mail · Telephone · Meetings · Formal letters · Audits · Field inspections |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Fortuna engaged with its stakeholders through on-line surveys, focus groups and interviews.
What actions were taken by Fortuna to combat corruption?
In its 2019 Sustainability Report Fortuna reports that it took the following actions for combatting corruption:
- Implementing a Code of Ethics
- Fortuna’s Code of Ethics sets out principals governing behaviour regarding 11 types of conduct, some of which are directly related to preventing acts of corruption, such as bribes, gifts, invitations and events involving a conflict of interest. All employees receive a copy of this code and are required to sign a certificate to acknowledge they have read it and will comply with the procedures and restrictions set out in the Code of Ethics. In 2019, Fortuna sought to strengthen knowledge of and compliance with the Code of Ethics by delivering a virtual course on its e-learning platform. Following completion of the course, employees were evaluated and received a certificate of compliance if they passed the test. The Code of Ethics also establishes how Fortuna’s reporting system functions. Under the system, any person who has knowledge of or is aware of a potential or suspected violation of the Code of Ethics is under an obligation to report it. Also, a whistle-blower system was designed to receive questions about ethical issues. Fortuna addresses breaches of the Code with strict confidentiality. The Code promotes the reporting of retaliation events against those who have submitted a complaint or who participate in an investigation through the above-mentioned channels. Fortuna does not tolerate any type of retaliation associated with complaints. The person responsible for overseeing the Code of Ethics is the Chief Compliance Officer (CCO). When a complaint is submitted, the CCO notifies the Chair of the Audit Committee and begins a thorough investigation. The CCO leads the process and reports directly to the Audit Committee. If needed, the CCO and the committee may request external legal advice. The CCO reports the cases to Fortuna’s Board through the Audit Committee. Fortuna also developed its Supplier Code of Ethics in 2019, to guide the ethical behaviour of its suppliers and other parties with whom it maintains business relationships. Like the Code of Ethics, this document describes certain behaviours associated with corruption, conflict of interest, gifts, etc. which are not acceptable in Fortuna. Fortuna provides a copy of this Code to all suppliers and requests that they sign an acknowledgement that they have read it and will comply with the provisions of the Code. The complaints associated with events of non-compliance with this Code follow the same procedure as the complaints in the Code of Ethics.
- Applying an Anti-corruption Policy
- Fortuna’s Anti-corruption Policy prohibits bribery, corruption, facilitation payments, gifts, and the payment of political contributions. The Policy provides limited situations in which expenses of government officials may be paid and places a dollar value limit on certain food and entertainment expenses. It also defines bribery and corruption, provides examples of what this may look like and defines government officials. This Policy also seeks to prevent employees and their family members from giving or receiving any gift, gratuity or invitation that could be perceived as an unjustified influence on a business relationship. Fortuna communicates this Policy by providing a copy to all new employees and all partners, agents, consultants, and other contractual parties who interact with government officials on the company’s behalf and conducts training on the Anti-corruption Policy for all employees in managerial and supervisory positions. Employees are requested to sign a certificate of compliance with this policy annually. This certificate serves to verify that they have not violated any of the terms and conditions of the policy and are unaware of any violation or potential violation of the policy. The person responsible for overseeing the Anti-corruption Policy is the CCO. Employees who become aware of a violation of the Policy must report the matter to their immediate supervisor/ manager or the CCO as soon as possible. If an employee reports the matter to their immediate supervisor/ manager, that supervisor/manager must immediately communicate the information to the CCO through the whistle-blower website. Where an employee does not want to report suspicious activity to their immediate supervisor/manager or directly to the CCO, then a report can be made anonymously through the whistle-blower website. The Policy provides that the CCO shall report all violations or potential violations of the Policy or applicable anti-bribery and anti-corruption laws to the Audit Committee, and the Audit Committee in consultation with the CCO shall determine the most appropriate method to investigate the substance of the complaints and ensure that there is appropriate monitoring of progress until the matter has been satisfactorily resolved. As needed, the CCO and the Audit committee may request external advice. When a complaint is submitted, the CCO notifies the Chair of the Audit Committee and begins a thorough investigation. The CCO reports the cases to Fortuna’s Board through the Audit Committee and, each year, the CCO requests each compliance officer of the subsidiaries in addition to the managers and chief financial officers to answer a series of questions seeking to verify that there have been no breaches of the Anti-corruption Policy. In addition, in connection with the annual preparation of audited financial statements, Fortuna is subjected to external audits by internationally recognised accounting firms such as KPMG and PwC on an annual basis, to verify compliance with the applicable sections of the Sarbanes-Oxley Act (SOX). These audits check that the channel to file complaints is active and functioning properly.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
1) Disclosure 205-2 Communication and training about anti-corruption policies and procedures
2) Disclosure 205-3 Confirmed incidents of corruption and actions taken
Disclosure 205-2 Communication and training about anti-corruption policies and procedures corresponds to:
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.5
Disclosure 205-3 Confirmed incidents of corruption and actions taken corresponds to:
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.5
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References:
1) This case study is based on published information by Fortuna, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:
http://database.globalreporting.org/
2) https://www.globalreporting.org/standards/gri-standards-download-center/
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