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Case study: How KS Energy combats corruption

Headquartered in Singapore, KS Energy Limited is an integrated services provider to the global oil and gas industry. KS Energy’s core activities are capital equipment charter, the provision of drilling and rig management services, and specialised engineering and fabrication. KS Energy is committed to setting and maintaining high standards of corporate governance in conducting its business and believes that strong corporate transparency, together with sound corporate policies, business practices and internal controls enables it to safeguard its assets and interests and attain sustainable growth.

This case study is based on the 2019 Sustainability Report by KS Energy 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.

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Anti-corruption is part of KS Energy’s culture  Tweet This!, both as part of its practice of good corporate governance and because KS Energy understands the grave consequence of legal breaches on the Group’s reputation and business operations. In order to combat corruption KS Energy took action to:
  • implement a Board Code of Conduct and Ethics and a policy for business conduct and ethical practices
  • apply a Whistle-blowing Policy
  • carry out corruption risk assessments

What are the material issues the company has identified?

In its 2019 Sustainability Report KS Energy identified a range of material issues, such as economic performance, environmental compliance, occupational health & safety, energy and emissions, labour & employment practices, socioeconomic compliance. Among these, combatting corruption stands out as a key material issue for KS Energy.

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:

“The reporting organization shall identify its stakeholders, and explain how it has responded to their reasonable expectations and interests.”

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 KS Energy engages with: 

Stakeholder Group                Method of engagement
Investors ·      Shareholder Meetings
Employees ·      Regular Meetings
Suppliers ·      Supplier assessments
Customers ·      Daily during operations
Bankers ·      Regular Meetings

How stakeholder engagement was made to identify material issues

To identify and prioritise material topics KS Energy carried out meetings and surveys with various working groups to gather opinions from each individual and feedback they may have received from external stakeholders such as customers, suppliers, bankers and investors through their informal discussions.

What actions were taken by KS Energy to combat corruption?

In its 2019 Sustainability Report KS Energy reports that it took the following actions for combatting corruption:

  • Implementing a Board Code of Conduct and Ethics and a policy for business conduct and ethical practices
  • KS Energy has adopted a Board Code of Conduct and Ethics, Terms of Reference of Board of Directors and Board Diversity Policy, as its Board is also committed to achieve a high level of professionalism, integrity, fairness, effective communications on its role, and standards of conduct in the discharge of their office. The Board Code of Conduct and Ethics is communicated to all Board members and a policy for business conduct and ethical practices also forms part of the KS Drilling company management system, stating that all employees are required to strictly comply with relevant Foreign Corrupt Practices Acts or equivalent law. The policy is provided to all new employees who receive an induction on KS Energy’s management system.
  • Applying a Whistle-blowing Policy
  • KS Energy has in place a Whistle-blowing Policy to provide an accessible channel through which employees and any other Group persons may report and raise in good faith and in confidence, any concerns about possible improprieties, fraudulent activities, or malpractices within the Group in a responsible and effective manner. The objective of the Whistle-blowing Policy is to facilitate independent investigation of such matters and for appropriate follow-up action. This policy was updated in FY2017 and reports can be made verbally or in writing to any member of the Audit and Risk Management Committee (“ARMC”) whose contact numbers and email addresses are stated in the said policy. External parties may also access the Whistle-blowing Policy, which is available on the corporate website. There were no whistle-blowing reports received in FY2019.
  • Carrying out corruption risk assessments
  • KS Energy has an Enterprise Risk Management (“ERM”) Framework (the “ERM Framework”), which governs its risk management process. Through this ERM Framework, risk capabilities and competencies are continuously enhanced. The ERM Framework also enables the identification, prioritisation, assessment, management and monitoring of key risks and associated key controls to KS Energy’s The ownership of these risks lies with the respective business operations and corporate executive heads, with stewardship residing with the Board. Risk assessments for prospective contracts are performed by senior management and include an assessment for the location of operations which considers a variety of location-specific issues, including anti-corruption. When challenging management’s proposals or decisions constructively, the Independent Directors bring independent and objective judgement to bear on business activities and transactions involving conflicts of interest and other complexities.

Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?

The GRI Standards addressed in this case are:

1) Disclosure 205-1 Operations assessed for risks related to corruption

2) Disclosure 205-2 Communication and training about anti-corruption policies and procedures

 

Disclosure 205-1 Operations assessed for risks related to corruption corresponds to:

Disclosure 205-2 Communication and training about anti-corruption policies and procedures corresponds to:

 

80% of the world’s 250 largest companies report in accordance with the GRI Standards

SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.

Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.



FBRH GRI Standards Certified, IEMA & CIM recognised Sustainability Course | Venue: London LSE

By registering for the next 2-day FBRH GRI Standards Certified, IEMA & CIM recognised course you will be taking the first step in gaining the many benefits of sustainability reporting.

Most importantly, you will gain the knowledge to use the GRI Standards, project manage your own first-class sustainability report and:

  • Identify your most important impacts on the Environment, Economy and Society
  • Begin taking solid, focused, all-round sustainability action ASAP

 

References:

1) This case study is based on published information by KS Energy, 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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