Case study: How Petra promotes ethical business conduct

What are the material issues the company has identified?  

In its 2019 Sustainability Report Petra identified a range of material issues, such as employee retention and development, environmental management, community development and engagement, climate change and energy usage. Among these, promoting ethical business conduct stands out as a key material issue for Petra.

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 Petra engages with:

To identify and prioritise material topics Petra engaged with its stakeholders through the following channels:

What actions were taken by Petra to promote ethical business conduct?

In its 2019 Sustainability Report Petra reports that it took the following actions for promoting ethical business conduct:

• Implementing a Code of Ethical Conduct
• Petra’s commitment to ethical behaviour is clearly set out in the Group’s Code of Ethical Conduct (“the Code”) and Petra expects all Directors, employees, contractors and suppliers to conduct themselves in accordance with this Code. Petra’s business ethics support the company’s corporate vision, mission and values and encourage and guide Petra to conduct its business professionally. The annual review of the Code was performed by the Board in November 2018. It was updated to incorporate references to the relevant provisions of the Criminal Finances Act 2017, and Petra’s general terms and conditions with suppliers, which now contain strengthened warranties regarding the avoidance of tax evasion, modern slavery, bribery and corruption, money laundering, child labour and advancement of human rights, including health and safety, and protection of the environment in accordance with United Nations Resolutions and corresponding national laws. Petra retains the right to disassociate itself from any entities that are in violation of these important principles. During FY 2019, a successful ethics roadshow was taken to all operations to re-emphasise ethical awareness and behaviour throughout the company, including in relation to matters such as bribery, fraud, diamond theft, supplier practices, conflicts of interest and market abuse.

• Combating bribery
• Bribery is strictly prohibited by Petra, and includes offering, giving, requesting or receiving a payment/ something of value (even of nominal value) to improperly influence a decision or encourage a party to perform its job improperly. No facilitation payments were made in FY 2019. Petra has a Group Anti-Bribery Policy which is made public on both the intranet and website, and which is implemented through a training and communication plan. All Petra employees, contractors and suppliers are informed as part of the induction procedure about this important corporate policy. During FY 2019, training on anti-bribery was conducted across the operations as part of the ethics roadshow. This was aimed at increasing awareness around bribery and encouraging the reporting of any instances of bribery or corruption. The Policy is reviewed on an annual basis by the Board and no updates were required in FY 2019. The Audit and Risk Committee receives a quarterly security intelligence report, detailing any investigations of bribery. This report provides details of incidents and actions taken (including fines and penalties). In FY 2019, appropriate action was taken for all investigated incidents. The current system is working well in terms of keeping the Board updated on this important aspect of governance.

• Implementing a whistleblowing procedure
• Petra has a whistleblowing procedure that provides all Petra employees, contractors and suppliers, as well as any member of the public, with the opportunity to independently and anonymously report conduct that is in contravention of the Code of Ethical Conduct or the Anti-Bribery Policy. In order to uphold its independence, this whistleblowing service is outsourced to a service provider. It is also provided in all local languages in the countries in which Petra operates as well as a number of international languages. Employees are briefed on whistleblowing, with hotline information being accessible on Petra’s website and intranet. All ‘tip-offs’ received, i.e. via telephone, fax, email, post or the website, will be directed to the service provider’s central facility for further investigation and feedback, where required. The identities of those reporting certain conduct as well as the contents of the tip-offs received are kept strictly confidential and protected according to applicable local and international laws. The service is monitored by the Audit & Risk Committee. In FY 2019, Petra received 27 reports involving alleged irregularities considered necessary to investigate. Of these reports, 20 were resolved and closed and seven remain under investigation.

• Respecting human rights
• Petra is fully committed to upholding the human rights of all of its stakeholders, as set out in the Group’s Human Rights Policy. The company therefore complies with and supports the UN Universal Declaration of Human Rights as well as all legislation pertaining to human rights in the countries where it operates. Petra similarly obtains warranties from its suppliers that they are not involved in any human rights abuses. Human rights are not considered to be a material risk to Petra’s business, given that its operations are located in stable, constitutional democracies and given the robust internal systems Petra has in place. Human rights issues are covered by internal operational policies and procedures, with the company’s Employment Equity Policy and its Disciplinary Code and procedures expressly forbidding any kind of discrimination. Should a human rights grievance occur, it is either managed through the operational grievance procedures or, where they are seen as substantive in nature, by the collective bargaining processes that are in place with recognised trade unions. In South Africa, human rights training (and in particular employee rights) is organised by Petra for union representatives through the Commission for Conciliation, Mediation and Arbitration (“CCMA”), which in turn disseminates its knowledge to its members. Petra has aligned its principles with the International Labour Organization Declaration on Fundamental Principles and Rights at Work. This means Petra has zero tolerance for child labour, forced labour or discrimination, and that it respects the right of its workers to form unions. There is no risk of child labour or forced labour taking place at any of Petra’s operations, due to its rigorous recruitment and pre-employment vetting process. Petra does not consider there to be a risk of slavery or human trafficking with regard to its operations or supply chain either, due to its due diligence processes with regard to its supply chain management.

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 408-1 Operations and suppliers at significant risk for incidents of child labor

3) Disclosure 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor

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 408-1 Operations and suppliers at significant risk for incidents of child labor corresponds to:

• Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
• Targets: 8.7
• Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
• Targets: 16.2

Disclosure 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor corresponds to:

• Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
• Targets: 8.7

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References:

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